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.
- 1 Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
- 2 Frank Lampard equalises for Manchester City against Chelsea: how the internet reacted
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Scotland could still declare independence – even without referendum, says Alex Salmond
Jennifer Lawrence leaked 4Chan sex video branded 'fake' by forum users
Britain First picture: Photographer 'horrified' after first Afghan policewoman killed by Taliban used for 'ban the burka' campaign
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...