* Sale is for $1.25 billion cash
* Expected to close in the next few months
By Jennifer Saba
NEW YORK, April 23 Thomson Reuters Corp
said on Monday it is selling its Healthcare business to
private equity firm Veritas Capital for $1.25 billion in cash.
The sale is part of the professional news and information
provider's plan to shed non-core businesses to concentrate on
faster growth areas like financial risk and compliance.
"We expect management will use the proceeds to invest or
make acquisitions in growing segments of the business," UBS
analyst Phillip Huang wrote in a note.
"This is consistent with CEO Jim Smith's playbook ... and we
expect management will use this same strategy to try to
accelerate growth in the Financial & Risk segment."
Thomson Reuters said last June that it intended to sell its
Healthcare unit, which provides data, analytics and other
services to improve efficiency to hospitals, government agencies
and healthcare professionals. The sale was temporarily suspended
in December due to challenging economic conditions, the company
said at the time.
In 2010, Healthcare pulled in approximately $450 million in
revenue with an operating margin of about 19 percent.
Thomson Reuters is trying to accelerate growth in the wake
of the financial crisis, during which customers in banking and
finance laid off tens of thousands of employees and cut costs.
The sale of the Healthcare unit, subject to regulatory
approval, is expected to close in the next few months.
Veritas Capital has obtained debt financing commitments for
the transaction, which is not subject to any financing
Morgan Stanley and Allen & Company are acting as
financial advisors to Thomson Reuters on the proposed
divestiture. Covington & Burling LLP is acting as legal counsel.
Thomson Reuters' U.S. shares were down 1.5 percent at $28.45
on the New York Stock Exchange amid a broader market sell off.
On the Toronto exchange shares were down 1.3 percent at C$28.27.