Blackstone to buy Thomson Reuters unit in $20b deal, CPPIB & Singapore GIC to co-invest

FILE PHOTO: The Thomson Reuters logo is seen on the company building in Times Square, New York October 29, 2013. REUTERS/Carlo Allegri/File Photo

A group led by Blackstone Group LP agreed to buy a majority stake in Thomson Reuters Corp.’s financial and risk unit in a deal that values the business at $20 billion, sealing plans for the firm’s biggest buyout in a decade.

Canada Pension Plan Investment Board and Singapore’s sovereign wealth fund, GIC Pte, will co-invest alongside Blackstone to acquire 55 percent of the business, according to a statement Tuesday. Thomson Reuters will retain a 45 percent equity stake. The unit, which provides data, analytics and trading to Wall Street and financial professionals around the world, doesn’t include the news-gathering operation.

“We are delighted to partner with Thomson Reuters in continuing to grow the financial and risk business,” Joe Baratta, Blackstone’s global head of private equity, said in the statement. “This is a landmark transaction for Blackstone and our investment partners.”

Thomson Reuters said it will receive about $17 billion in proceeds, consisting of $3 billion from the Blackstone-led group and $14 billion in debt and preferred equity. The company will use the money to repay debt, establish a new standalone company, pursue organic growth and M&A and repurchase stock, according to the statement.

The new company also entered a 30-year agreement to pay Reuters News at least $325 million a year for its news and editorial content, according to the statement.

Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. will provide debt financing for the deal. The package will include leveraged loans and high-yield bonds denominated mostly in dollars, people with knowledge of the matter said earlier.

FX, Treasury

Blackstone sees attractive growth in the Thomson Reuters unit’s data feed, its foreign exchange and treasury trading platforms, as well as its risk and compliance business, a person familiar with the matter said before the deal was announced. The division would also be able to improve operations more quickly as a private company, the person said. The F&R unit accounted for more than half of adjusted earnings before interest, taxes, depreciation and amortization in 2016.

“Blackstone’s strong relationships in the financial services industry and long and successful history of corporate partnerships will help F&R provide new and innovative products and services,” said Jim Smith, president and chief executive officer of Thomson Reuters.

Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in providing news, data and information to the financial industry. Peter Grauer, chairman of Bloomberg LP, is a non-executive director at Blackstone.

The transaction, Blackstone’s biggest by enterprise value since the firm’s $26 billion buyout of Hilton Worldwide Holdings Inc., harks back to private equity’s so-called Golden Age, when firms bought about 20 supersized companies from 2005 to 2007. It will add to the $105 billion of private equity deals targeting the media and technology industries over the past 12 months, according to data compiled by Bloomberg.

The Thomson Reuters deal will be done by Blackstone’s private equity unit, which is in the process of deploying an $18 billion fund. It is expected to close in the second half of 2018.

Canson Capital Partners, Bank of America’s Merrill Lynch, Citigroup and JP Morgan were financial advisers to the Blackstone-led consortium, with Simpson Thacher & Bartlett LLP providing legal advice. Guggenheim Securities, TD Securities Inc. and Centerview Partners advised Thomson Reuters.

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Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.