Thomson Reuters (TSX/NYSE: TRI) reported results for the second quarter ended June 30, 2018 and reaffirmed its full-year 2018 outlook provided on May 11, 2018. The company also announced that its planned sale of a 55% interest in its Financial & Risk (F&R) business to private equity funds managed by Blackstone is expected to close early in the fourth quarter of 2018.
“I am pleased with our second-quarter and first-half results, which put us on track to deliver a solid year,” said Jim Smith, president and chief executive officer of Thomson Reuters. “Following the close of our partnership with Blackstone, Thomson Reuters will be well positioned to strengthen and grow our business. We have leading positions and must-have tools in our core markets. I believe we have a bright future doing what we do best: combining information, technology and human expertise to provide trusted answers.”
Consolidated Financial Highlights – Three Months Ended June 30
Unless otherwise noted, all results are from continuing operations and exclude the results of the company’s Financial & Risk business unit (F&R). For 2018 reporting purposes, F&R is classified as a discontinued operation, Reuters News is a reportable segment and prior-year results have been restated accordingly.
Three Months Ended June 30,
(Millions of U.S. dollars, except for adjusted EBITDA margin and EPS)
|IFRS Financial Measures||
Thomson Reuters previously signed a definitive agreement to sell a 55% majority stake in the Financial & Risk business and enter into a strategic partnership with private equity funds managed by Blackstone. Canada Pension Plan Investment Board and an affiliate of GIC will invest alongside Blackstone. Thomson Reuters will receive approximately $17 billion in gross proceeds at closing (subject to purchase price adjustments) and will retain a 45% interest in the business. The transaction is expected to close early in the fourth quarter of 2018 and is subject to specified regulatory approvals and customary closing conditions. Substantially all required regulatory approvals have been received at this time.
The company repurchased 9.1 million shares during the second quarter at a cost of $359 million under its $1.5 billion buyback program, which is being effected under the company’s normal course issuer bid (NCIB). The company did not repurchase any shares in the first quarter.
The company currently expects to use between $9 billion and $10 billion of the estimated $17 billion of gross proceeds of the Financial & Risk transaction to return capital to its shareholders. A significant portion of this return is expected to be through a substantial issuer bid/tender offer made to all shareholders, which may be at a premium to the then-current market price of the company’s shares. The company’s principal shareholder (Woodbridge) is expected to participate pro rata in the substantial issuer bid/tender offer. Repurchases in 2018 under the NCIB program prior to the closing of the transaction will be included in the contemplated $9 billion and $10 billion of shareholder returns.
The company also announced it is transitioning from a product-centric structure to a customer-centric structure. This new structure is intended to move decision making closer to the customer and allow it to serve customers better with its full suite of offerings. The company expects to begin reporting under the new organizational structure with its fourth-quarter 2018 results.
Source: Thomson Reuters Earnings Report