Nasdaq OMX Group (NDAQ) said Wednesday that it has agreed to terms with Thomson Reuters (TRI) to acquire its investor, public relations and multimedia solutions business for $390 million in cash. The Reuters multimedia division delivers insight, analytics and communications solutions to more than 7,000 clients in 60 countries. Combined, the businesses generated $233 million in sales for Reuters in the 12 months ended September 30.
Nasdaq said its funding the acquisition through cash on hand and its $750 million line of credit.
Reuters IR division includes the ThomsonONE communications platform and IR website hosting. The PR end offers a wide array of Internet communications tools, such as contact databases and self-services press releases.
The exchange operator intends to integrate the operations into its Nasdaq OMX Corporate Solutions segment to provide its customers more comprehensive offerings creating a “best of breed products, technologies and service model.” Nasdaq expects the acquisition to be accretive within the first 12 months upon completion of the deal, less costs associated with the transaction.
"In one acquisition, we accelerate and achieve our Corporate Solutions long-term objectives, while maintaining our balanced strategy of delivering value to shareholders," said Bob Greifeld, chief executive at Nasdaq OMX. "The combination of these two successful companies represents a distinct opportunity to create a truly unique client experience through premier content and best in class platforms.”
Trading volume has been slacking at Nasdaq, so the company has been building its corporate solutions arm to sell to traders and companies. In October the company bought the index business from Mergent, Inc., giving it ownership of Indxis.com and Dividend Achievers Indexes and making it a leader in dividend-based index information. Sales not associated with market transactions are now nearly three-quarters of Nasdaq OMX Group revenue.
On Monday Nasdaq OMX said that it is buying a 25 percent of Dutch cash equity and equity derivatives trading venue The Order Machine, or “TOM,” with an option to secure a controlling stake.
The move by Reuters is another in its restructuring efforts to unload non-core assets to focus on its financial markets business. Reuters said in April that it was selling its healthcare operations to private equity firm Veritas Capital for $1.25 billion in an all-cash deal. Attempting to strengthen its core competencies, Reuters said in July that it was spending $625 million to buy foreign exchange platform FX Alliance.
Shares of NDAQ have popped ahead by 4 percent on the day while shares of TRI are up by 1.5 percent.
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