Blackstone Group has officially acquired a 55% stake in Thomson Reuters’ Financial and Risk unit (which offers analytics and trading solutions to financial professionals).
The deal values their F&R unit at $20B with TR receiving close to $17B from the private equity firm to pay down their debt, cash taxes, and transaction expenses.
Reuters can’t compete with Bloomberg
Back in 2007 when Thomson merged with Reuters, the 2 companies struggled to combine their core products, creating little buzz from the launch of their information terminal Eikon in 2010.
And the past decade hasn’t changed a thing — Reuters’ F&R unit continues to struggle selling their bread and butter trading terminal, playing second fiddle to rival Bloomberg (as of 2016, Bloomberg maintained a 33% market share in F&R, compared to Reuters’ 23%).
So what does Blackstone want with it?
Despite TR’s struggles, their data analytics division still makes up the majority of their revenue, with over $6B in 2017 sales.
According to the Financial Times, Blackstone intends to use their long history on Wall Street to boost purchasing at TR, which has already shown signs of new life since companies caught wind of the deal a few days ago.
Coming out of the shadows
This deal is Blackstone’s largest since the financial crisis (from which they prospered heavily), and since then, they’ve flown relatively under the radar.
Now, Blackstone’s crawling out from the dark stone they’ve been living under to take a chance on a resurgent Wall Street.