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Reed talks of more acquisitions

27.07.07

Reed Elsevier is looking to sell its stake in HM Riverdeep to enable more acquisitions. According to the Financial Times, the publisher could add the proceeds of its 11.8% stake to higher borrowings in order to step up its acquisition spending.

"Sir Crispin Davis, chief executive, admitted that Reed had agreed to take the stake in Barry O'Callaghan's educational publishing group to smooth its purchase this month of Reed's Harcourt Education business. 'We don't take the view that's a long-time shareholding.'

"Reed had been 'smart or fortunate' to agree the earnings-neutral deal before credit markets tightened, he said, but was confident that the buyer had financing in place. Reed is returning to shareholders the $4bn (£1.9bn) after-tax proceeds raised by selling its education businesses to HM Riverdeep and Pearson, owner of the Financial Times.However, Sir Crispin said it generated $500m of annual free cash flow and had 'a reasonable amount of headroom' for extra debt. It was interested in acquiring businesses in the e-health and risk markets, he added.

"Reed reported a 13% rise in pre-tax profits to £350m for the six months to 30th June, as a weaker dollar held back growth from favourable markets, cost-cutting and the roll-out of digital platforms for legal, scientific and business communities."

Financial Times

reed elsevier Riverdeep Crispin Davis

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