LONDON Jan 17 Reed Elsevier
said on Thursday it had sold its LexisNexis screening business
to a private equity group as part of a move to focus on assets
with more predictable earnings and higher margins.
The professional publishing group said it had sold the
business, which screens potential employees, to U.S.-based
Symphony Technology Group (STG). The news sent the London-listed
shares in Reed up 1 percent to 677 pence, their highest level
for five years.
The screening business employed about 1,000 people and
generated annual revenues of around $180 million, a person
familiar with the situation said.
"No price for the disposal has been announced, but we
estimate this type of asset would achieve a multiple of 9-10x
EV/EBITA and potentially raise up to $300 million for Reed,"
analysts at UBS said.
"The employee screening unit was a decent asset, but to take
it to the next level would have potentially required notably
more capital in our view. We think ongoing, proactive
optimisation of the portfolio should accelerate growth in the
group and enhance margins."
UBS noted that previous disposals had resulted in increased
buybacks. The analysts said an incremental $300 million to its
ongoing buyback programme would enhance consensus 2013 earnings
per share by 0.5 to 1 percent.