OTTAWA (dpa-AFX) - Thomson Reuters (TRI) announced a definitive agreement to enter into a strategic partnership with Blackstone. The company will sell a 55% majority stake in its F&R business to private equity funds managed by Blackstone. The transaction values the F&R business at approximately $20 billion. Thomson Reuters will receive approximately $17 billion in gross proceeds at closing funded by $14 billion of debt and preferred equity to be incurred by the partnership and a $3 billion cash equity contribution by Blackstone. Using the proceeds, the company expects to pay down sufficient outstanding debt to remain below its target net debt-to-EBITDA leverage ratio of 2.5x (debt repayment estimated at approximately $3 billion).
The new partnership will be managed by a 10 person board composed of five representatives from Blackstone and four from Thomson Reuters. The President and CEO of the new partnership will serve as a non-voting member of the board following the closing of the transaction.
After closing of the transaction, Thomson Reuters will focus its efforts on expanding its market segment positions and accelerating growth in its Legal, Tax & Accounting and Regulatory businesses. The company will retain a 45% interest in the F&R business. Thomson Reuters will also maintain full ownership of its Legal, Tax & Accounting and the Reuters News businesses. F&R and Reuters News will sign a 30-year agreement for Reuters to supply news and editorial content to the new partnership. Under the agreement, F&R will pay Reuters a minimum of $325 million annually.
On January 30, 2018, the Thomson Reuters board of directors approved maintaining the dividend at $1.38 per common share. A quarterly dividend of $0.345 per share is payable on March 15, 2018 to common shareholders of record as of February 22, 2018.
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