Thomson Reuters in Talks to Sell Stake in Unit to Blackstone
Are there recent case studies or precedents around this sort of PE "partnership" into a public company? Its a majority stake into a specific line of business. I know of out right purchases of public companies or units of public but the language pf partnership is throwing me off. Maybe its just IR spin.
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They're just buying a majority stake in that division of Thomson Reuters. The whole "partnership" concept is just the language that PE firms use when buying things, since it suggests that they will be a value-add "partner" in growing the business and are not just a profit seeking, self interested entity.
Thanks @Leveraged_Ape" Yeah its majority stake. It just seemed uncommon to me. PE taking a stake in a public company's specific unit. As opposed to buying the whole unit or the company.
Reading deeply into this
"The division could also improve operations more quickly as a private company, the person said. The unit accounted for more than half of adjusted earnings before interest, taxes, depreciation and amortization in 2016."
I can see how the article in your initial post could be confusing, but this is really just Reuters spinning out a division with Blackstone as the acquirer. It's front page news because BX is doing it and it's a multi billion dollar deal, but on a high level, it's really just a corporate divestiture.
On a deeper level it’s not - the payment terms envisage an annuity like payment stream of $3xxm annually for a period of 30 years (over $10bn in total). Pretty interesting, landmark transaction.
It's definitely an interesting transaction, but what they're paying the ~$300mm/year for is access to Reuters' news platform and associated data, and it's not BX and their equity partners paying that, it's coming from the newco. Also, without access to that, Reuters terminals have substantially less value (it would be like buying a Bloomberg carve out containing only the terminals and no news) so it's basically a subscription service at a price that is locked in for 10 years, which also conveniently allows them to price in a major cost for the entirety of their hold period. The actual structure of the transaction will be traditional (obviously subject to deal specifics).
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