Reed Elsevier Buys ChoicePoint for $4.1B; Reed Elsevier to Buy ChoicePoint for $4.1 Billion in Cash, Net in Income Doubles

Feb.21, 2008 in Mergers and Acquisitions

LONDON (AP) — Reed Elsevier PLC, the owner of the Lexis Nexis information service, said Thursday it will buy U.S. data services firm ChoicePoint Inc. for $4.1 billion in cash.Reed, a London-based educational publisher, will assume $600 million in debt, the company said in a statement.

ChoicePoint, headquartered in Alpharetta, Ga., has more than 5,000 employees and provides data and analytics to the insurance industry.

“The combination of ChoicePoint’s highly regarded data and analytics assets with LexisNexis’s market leading technology can be leveraged to create greater opportunities in addressing the growing risk information and analytics needs in insurance, financial, legal, screening, law enforcement, public safety, healthcare and other sectors,” Reed Elsevier said.

Separately, the company said annual net income almost doubled to 1.2 billion pounds ($2.3 billion), compared with 625 million pounds in the previous year.

Sales rose 2 percent to 4.6 billion pounds ($9 billion).

The company did not break out quarterly earnings.

The acquisition could strengthen Reed Elsevier’s shares as defensive investments during tougher economic times, one analyst said.

“Reed’s reputation for being a defensive media stock has received a triple boost today, not only do the results confirm such status, but a considerable sale and acquisition further enhance the view,” said Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers in London.

“A sale of the more cyclical Business Information division and acquisition of the US data services group ChoicePoint, moves the company further into the arena of more defensive support services.”

Shares of Reed Elsevier rose 5.4 percent to 615.5 pence ($11.98) on the London Stock Exchange.

http://biz.yahoo.com/ap/080221/reed_elsevier_choicepoint.html

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