(Adds decline to comment from RELX, updates stock price, adds
graphic link)
By Jessica Toonkel and Abhirup Roy
Nov 11 (Reuters) - Thomson Reuters Corp TRI.N TRI.TO
said on Wednesday it was exploring strategic options for its
Intellectual Property & Science business, which had revenue of
about $1 billion in 2014.
The business, which has 3,200 employees, provides
intellectual property and scientific information and associated
tools and services to governments, universities and companies.
"While a few of IP & Science's businesses operate at the
intersection of global commerce and regulation, the vast
majority of the unit does not align in the same way as our other
business units," Chief Executive Jim Smith told employees in an
e-mail on Wednesday.
"The decision we are announcing today reflects the difficult
choices we must all make every day as we prioritize our
resources and energy towards our key growth opportunities,"
Smith said.
Analysts estimate that the business could be valued at more
than $3 billion, or more than 10 times EBITDA (earnings before
interest, tax, depreciation and amortization).
Possible suitors for the business include Amsterdam-based
Elsevier, Hoboken, New Jersey-based John Wiley & Sons, Inc
JWa.N and Springer Nature, which has offices globally, said
Sanford Bernstein analyst Claudio Aspesi.
Thomson Reuters spokesman David Crundwell declined to
comment on valuation. Thomson Reuters is the parent of Reuters
News.
Springer and Elsevier's parent, RELX Group, declined to
comment. Wiley did not respond to e-mailed requests for comment.
Thomson Reuters' decision to sell the business did not come
as a big surprise to analysts, given that it is not a key part
of the company's growth strategy.
"There is no obvious path to making it larger and more
profitable," Aspesi said.
The IP and Science business contributed about 8 percent of
Thomson Reuters' total revenue of $12.6 billion before currency
adjustments last year.
The unit's revenue rose 3 percent in 2014, compared with 1
percent growth in the company's total revenue before currency
adjustments.
Thomson Reuters said it would use any net proceeds from a
potential transaction for general purposes, including investing
in its core businesses, repaying debt and accelerating share
buybacks. urn:newsml:reuters.com:*:nPn69dM5b
National Bank Financial analyst Adam Shine said he would
view the divestment of the unit for these purposes as "a
positive."
Basil Moftah, formerly president of the unit, is leaving
Thomson Reuters and has been replaced as president by Vin
Caraher, who previously led the Thomson Scientific business.
Guggenheim Securities LLC and JPMorgan Chase & Co (N:JPM) JPM.N
are financial advisers to the company.
U.S.-listed shares of Thomson Reuters were trading around
$40.79 on Wednesday afternoon, up over 2 percent. Shares of the
company's Toronto-listed stock were trading at $54.11, up around
2 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For information about Thomson Reuters' IP and Science business,
go to http://link.reuters.com/ben95w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>