The company finalized the divestment of a majority stake in its printing unit.
This is part of a broader strategy to focus more on tech-forward offerings.
The divestment of a majority stake in a legacy business was the factor lifting Thomson Reuters (NASDAQ:TRI) stock above many others on Thursday. With that tailwind at its back, the business-focused media company's stock rose by more than 2% that trading session, on a day when the bellwether S&P 500 index only crept up by 0.2%.
That morning, Thomson Reuters announced that it had closed the sale of a 51% stake in its global print unit. The buyers are what the company described as "capital accounts," advised by the veteran private equity firm KKR (NYSE:KKR).
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Following the sale, the newly named Westbridge Print will operate as a joint venture, with Thomson Reuters retaining a minority stake. Westbridge will concentrate on publications for legal and tax professionals. It will also offer commercial printing services for book publishers.
The move is an attempt to narrow Thomson Reuters' focus on next-generation, artificial intelligence (AI) solutions targeting industries it has served for years. Namely, these are the tax, audit, compliance, and legal fields.
The company did not provide any financial details of the transaction in its announcement. However, when originally divulging the sale in July, it said KKR would pay roughly $500 million.
Thomson Reuters is clearly determined to push hard into next-generation offerings for its relatively affluent client base. This strategy depends on being tech-forward, so shedding large stakes in legacy operations like print media makes a great deal of sense.
So we should consider this to be good news from Thomson Reuters, and a sure sign that it's executing on an important objective.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends KKR. The Motley Fool recommends Thomson Reuters. The Motley Fool has a disclosure policy.