TORONTO - Thomson Reuters (TSX:TRI) (TSX/NYSE: NYSE:TRI), a global provider of news and information-based tools to professionals, has entered into a definitive agreement to sell its legal assistance and marketing platform FindLaw to Internet Brands. The deal, which is subject to regulatory approvals, is expected to be finalized in the fourth quarter of 2024.
FindLaw, known for being a leading online destination for legal assistance, has been part of Thomson Reuters' suite of services for the past two decades. The platform has become a significant resource for individuals seeking legal information and for law firms aiming to market their services.
Internet Brands, a fully integrated online media and software services company, operates various digital platforms across verticals such as Health, Legal, and Automotive. The acquisition of FindLaw is anticipated to complement its current legal market holdings, which include Nolo, Avvo, and Martindale.
The transaction is seen as a strategic move for both companies, allowing them to focus on their core priorities while aiming to ensure that FindLaw's customers continue to receive high-quality service. Centerview Partners LLC acted as the financial advisor to Thomson Reuters for this transaction.
Both Thomson Reuters and Internet Brands have stated that this agreement will enable them to concentrate on their strategic priorities. Thomson Reuters will continue to provide content and technology for professionals in legal, tax, accounting, compliance, government, and media sectors. Meanwhile, Internet Brands, which is a portfolio company of KKR and Warburg Pincus, will look to invest in and expand the FindLaw business through its proprietary operating model that has supported its digital platforms since 1998.
This news is based on a press release statement and includes forward-looking statements that are not guaranteed to occur. The sale is pending and subject to regulatory approvals, which could affect the expected closing date of the transaction.
In other recent news, Thomson Reuters has announced a series of developments. The company is set to introduce a digital subscription service, with an initial charge of $1 per week. The service will require users to register on its website, which previously offered content at no cost. This move follows a three-year delay due to a dispute with London Stock Exchange Group (LON:LSEG) over potential violations of their news supply agreement.
Thomson Reuters also saw its stock rating upgraded by Scotiabank (TSX:BNS) from Sector Perform to Sector Outperform, with an increased price target of $182.00. Scotiabank suggests that the current stock price does not fully reflect the potential revenue growth from the company's investments in GenAI capabilities.
In terms of technology, Thomson Reuters introduced its next-generation artificial intelligence assistant, CoCounsel 2.0. It is designed to enhance productivity for professionals across various industries, delivering answers three times quicker than its predecessor and integrating capabilities from OpenAI, Google (NASDAQ:GOOGL), and Thomson Reuters' own content and legal technology.
On the financial front, Thomson Reuters reported robust second-quarter results, leading to an increase in its full-year 2024 revenue outlook. The company's organic revenues grew by 6%, with products such as Practical Law and Confirmation showing double-digit growth. These are the recent developments in Thomson Reuters.
InvestingPro Insights
Thomson Reuters' strategic decision to sell FindLaw aligns with its focus on core business priorities, as reflected in recent financial data and analyst insights from InvestingPro. The company's market capitalization stands at $75.94 billion, underscoring its significant presence in the information services industry.
According to InvestingPro data, Thomson Reuters has demonstrated solid financial performance with a revenue of $7,034 million in the last twelve months as of Q2 2024, showing a growth of 4.61%. This growth trajectory is further supported by a quarterly revenue increase of 5.65% in Q2 2024. These figures suggest that the company's core operations remain robust, potentially justifying its decision to divest non-core assets like FindLaw.
InvestingPro Tips highlight that Thomson Reuters "has maintained dividend payments for 36 consecutive years" and "operates with a moderate level of debt." These factors indicate financial stability and a commitment to shareholder returns, which could be further strengthened by the proceeds from the FindLaw sale.
However, it's worth noting that the company is "trading at a high earnings multiple" and has a P/E ratio of 32.41. This valuation suggests that investors have high expectations for future growth, which the company may be aiming to meet through strategic moves like the FindLaw divestiture.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Thomson Reuters, providing a deeper understanding of the company's financial health and market position.
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