Reed wins Mead Data auction with pounds 955m bid
Pierre Vinken, Reed's chairman, said the legal and business information group was a perfect fit - the company already owns Butterworth's, the world's second largest legal publisher.
The deal will bias Reed towards the US and technical publishing and away from Europe and consumer publishing. After it is completed North America will account for 44 per cent of sales rather than 37 per cent, while professional publishing's share of turnover will rise from 16 to 25 per cent.
Mr Vinken said the shift was in line with the group's strategy of targeting English language subscription-based publishing in the professional and business markets and especially in the US.
It also needed to gain experience of electronic publishing. That was an area where financial markets had led the way 'but we can't buy Reuters, and the legal market is the next most developed area', he said.
The Anglo-Dutch company will borrow dollars 1bn to finance the deal, funding the rest from cash resources. The extra borrowings mean interest cover falls from more than 13 times to around six times.
The purchase means Reed is no longer in the market to buy Ziff Davis, the dollars 3bn US computer publishing group. But Mr Vinken said he remained interested in parts of the Ziff empire.
Mead made operating profits of dollars 68m on sales of dollars 551m last year. In the first eight months of this year it made operating profits of dollars 58m on sales of dollars 406m.
Mr Stapleton said the transaction would be earnings enhancing this year. US tax rules meant the company could amortise dollars 1.2bn of intangibles over the next 15 years and the first dollars 85m of profits would thus be tax-free.
The deal catapults Reed into the top three publishers in the US legal market. Lexis is one of two big on-line legal databases in the US, with around 200,000 regular users. Nexis is the world's biggest business and financial database.
The party's potential nominations read like a high school race for student body president
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...