--Nasdaq OMX Group agrees to buy the Thomson Reuters businesses
for $390 million
--Purchase will more than double the size of the exchange
operator's corporate-solutions business
--Deal is expected to close in the first half of 2013 and to add
to Nasdaq's earnings within the first year
(Adds more context and details throughout.)
By Matt Jarzemsky and Jacob Bunge
Nasdaq OMX Group Inc. (NDAQ) has agreed to acquire Thomson
Reuters Corp.'s (TRI, TRI.T) investor-relations, public-relations
and multimedia-services businesses for $390 million, in a bid to
bolster its growing corporate-solutions unit.
The exchange group has sought to diversify as its U.S.
stock-trading business struggles with a multiyear slide in trading
activity. Nasdaq has made a spate of deals of late to expand its
operations in market-data and global securities markets.
The purchase will more than double the size of Nasdaq's
corporate-solutions business. Nasdaq currently counts about 3,000
clients for its offerings, while the Thomson Reuters division
serves about 7,000 customers across 60 countries, though there is a
10% overlap between the two, according to the companies.
Nasdaq's push into corporate solutions has seen the exchange
operator branch into services such as providing press-release
distribution and investor webcasts, essential services that many
public companies choose not to run themselves.
The Nasdaq unit's revenue jumped 33% to $24 million in the third
quarter. Companywide, revenue declined 6.2% to $409 million.
But the effort also has opened new pitfalls for Nasdaq OMX: In
2011 the company said its Directors Desk service, a web tool for
sharing sensitive company documents among corporate board members,
had been breached by hackers, forcing Nasdaq OMX to alert
authorities and boost security.
Both Nasdaq OMX and rival NYSE Euronext (NYX) use corporate
services as an incentive for companies to list shares on their
exchanges, and NYSE Euronext currently provides Thomson Reuters
services to NYSE-listed companies as part of the Big Board's own
issuer-services offering. NYSE Euronext's contract with Thomson
Reuters expires next year.
A spokesman for NYSE Euronext declined to comment on whether the
exchange group would look to extend it to partner with a different
provider.
Nasdaq OMX's bid for the Thomson Reuters business beat out a
joint bid by NYSE Euronext and Ipreo, another provider of
investor-relations services, according to a person involved in the
discussions. A spokesman for NYSE Euronext declined comment. A
representative for Ipreo didn't respond to a request for
comment.
The deal is expected to close in the first half of next year,
and Nasdaq expects it to add to earnings within the first year,
excluding transaction-related costs.
In October, Nasdaq agreed to acquire the index business of
Mergent Inc. in a deal that would make the exchange operator one of
the largest providers of dividend-themed indexes.
Thomson Reuters announced a restructuring of its markets
business last year and underwent a reshuffling of its top
leadership ranks. In April, the company said it would sell its
health-care business to private-equity firm Veritas Capital for
$1.25 billion.
Nasdaq's shares rose 3.8% to $24.31 Wednesday.
--Saabira Chaudhuri contributed to this article.
Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com and
Jacob Bunge at jacob.bunge@dowjones.com
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