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The Clarivate-ProQuest Wake-Up Call
by
Posted On May 25, 2021
It was a wake-up call. Literally. At 6:30 a.m. EDT on May 17, 2021, the email arrived with the announcement that the public company Clarivate intended to acquire ProQuest from the privately held, family-owned Cambridge Information Group and minority owner Atairos. The investor call was scheduled for 8 a.m. On the call, the financial aspects of the acquisition were discussed. The purchase price is $5.3 billion, with $4 billion of that being in cash and the remaining $1.3 billion in equity. Clarivate will also refinance ProQuest’s debt. The transaction is expected to close in Q3 2021, pending “customary closing conditions, including regulatory approvals,” according to the press release.

Clarivate executive chairman and CEO Jerre Stead emphasized that the companies were in complementary businesses and that innovation was key when considering the acquisition. He sees the combined companies as being able to open new sales opportunities and even talked about upselling products. He cited the importance of content aggregation and a growing market in libraries for enterprise software. Predictive and prescriptive analytics opportunities exist when ProQuest’s data cloud can be combined with the Clarivate Research Intelligence Cloud.

ProQuest’s chairman, Andy Snyder, will become vice chairman of the Clarivate board, and Michael Angelakis, chairman and CEO of Atairos, will also join the Clarivate board. On the investor call, Snyder referred to ProQuest as “Bloomberg for academia,” a phrase probably never uttered by any academic librarian, but one that resonated with the financial community. He revealed that the content portion of ProQuest accounted for 62% of its revenue, with software at 34%. Furthermore, 40% of revenue comes from outside North America, and 81% of customers are in the higher education segment.

Origins of Clarivate and ProQuest

Both Clarivate and ProQuest are well-known in the library community, and both reached their current corporate status by virtue of numerous mergers and acquisitions. As Stead said in the press release, both have “a rich and storied heritage.” The current Clarivate resulted from a merger of Clarivate Analytics with Churchill Capital Corp. Churchill was formed specifically as a vehicle for acquiring companies, with Stead at its helm and its headquarters in London. When Thomson Reuters spun off its Intellectual Property & Science unit in 2016, the company renamed itself Clarivate Analytics, retaining its Philadelphia headquarters.

It is possible to trace the history of Clarivate all the way back to 1864, when the Zoological Record began publishing, but most peg the true origin of the company at 1956, when Eugene Garfield founded the Institute for Scientific Information (ISI) to commercialize his ideas about citation analysis as a metric of impact. Thomson Corp. bought it in 1992 and proceeded to acquire and divest several properties, including, ironically, Dialog, which ended up as part of ProQuest.

With a focus on science, technology, and intellectual property, Clarivate owns Web of Science, Cortellis, Derwent, CompuMark, MarkMonitor, and Techstreet. Both before and after it became a public company in 2019, it acquired Publons, Kopernio (renamed to EndNote Click), TrademarkVision, SequenceBase, Darts-ip, Decision Resources Group, CustomersFirst Now, and CPA Global. Its Journal Citation Reports project is closely watched in academia as an indication of the impact value of research, as evidenced by the attention being paid to its May 2021 rollout of the Journal Citation Indicator, which field-normalizes the measurement of impact.

ProQuest traces its origin back to 1938 and another Eugene—Eugene B. Power, who founded University Microfilm International (UMI). UMI started by microfilming doctoral dissertations, along with a number of other microfilm and preservation projects. ProQuest has continued this preservation initiative, not only digitizing dissertations and theses, but also unique collections it has added to ProQuest History Vault. ProQuest has a major presence in the ebook market, having acquired both Ebrary and Ebook Library, which it combined into a single ebook platform. Moving into video, ProQuest acquired Alexander Street Press in 2016.

On the investor call, Snyder made reference to his father, Bob Snyder, buying Cambridge Scientific Abstracts (CSA) in 1971. It was CSA’s parent company, Cambridge Information Group, that bought ProQuest in 2006 and chose the ProQuest name rather than the Cambridge one for the combined company. It bought Dialog in 2008.

ProQuest’s current strengths lie in the content it aggregates from other publishers and in the library technology area. The latter is where the current Clarivate has no presence. ProQuest acquired ExLibris in 2015, combining its discovery products with ProQuest Summon. In 2020, ProQuest added Innovative to its library workflow management and discovery portfolio.

Synchronicities and Disconnects

Although both Stead and Snyder touted the complementarity of Clarivate and ProQuest, Clarivate is strongest in science, technology, and intellectual property. ProQuest clearly has the edge in information that’s relevant to the humanities and social sciences. Its historical newspapers, multidisciplinary ebooks, dissertations, data sources, and video expand the topic areas of Clarivate.

Both Clarivate and ProQuest have their corporate fingers in many library pies, from content to workflow. Clarivate is more of the pure play when it comes to content, with scientific and intellectual property databases at its core. ProQuest is much broader in scope. The funding and research information from Ex Libris has significant synergy with Web of Science. RefWorks and EndNote have overlapping functionalities. Content overlaps, at least in scope if not in actual products, exist mainly in the area of intellectual property. When Dialog Solutions repositioned itself to focus on the pharmaceutical industry, intellectual property, and competitive intelligence, it competed directly with Clarivate. Expect to see consolidation in this area.

Librarian reactions to the acquisition range from the very negative (K. Matthew Dames, university librarian at Boston University, tweeted that it was an “existential threat to the academy”) to the merely frustrated (several librarians decrying their potential future dealing with multiple reps, confusing negotiations, and billing problems). Dominic Broadhurst, head of content and discovery at the University of Salford, tweeted that consolidation has been a pattern in the industry for years. It’s simply easier to acquire a company than to develop your own systems, tools, platforms, and analytics. Other information professionals raised the issue of monopoly, but the market is probably not large enough to grab the attention of government agencies, either in the U.K. or the U.S.

Given the state of academic library budgets, it’s unclear how well Stead’s plans for cross-selling and upselling, as expressed during the investor call, will play out. It’s also unclear how he came up with the statement that they’ve experienced a 100% renewal rate. If a library has 10 Clarivate and ProQuest products, but cuts nine of them, does that count toward the 100% renewal rate? Libraries are being forced to cut back, to cancel subscriptions, and to operate with severely reduced monetary resources. This does not bode well for content companies, particularly with the increased availability and acceptance of OA publications and the advent of read-and-publish agreements. Library budgets are not elastic; they won’t stretch very far in today’s environment.

With any acquisition comes questions that simply can’t be answered in the short term. One is about the agreement ProQuest has with Dow Jones’ Factiva for marketing to higher education institutions. Will it continue or not? Another concern is branding. Clarivate eliminated the ISI brand, only to bring it back. Perhaps we’ll see something similar with ProQuest branding. Pricing is always a concern to libraries and information professionals. If Clarivate moves away from the transactional pricing now used by Dialog Solutions, it will be a major blow to independent researchers and some in the corporate market.

The emphasis placed on the academic, corporate, and government markets during the investor call leads to the possibility that the combined company will downplay other markets, possibly divesting products such as CultureGrams and discontinuing its digitization of primary materials.

The number of times enterprise software was mentioned on the investor call could have been because it resonates with the financial community. “Library discovery systems” or “library workflow technology” just doesn’t have the same clout. It might also, however, reflect where the combined companies see possibilities for growth. In The Scholarly Kitchen, Roger C. Schonfeld speculates that ProQuest “will eventually join Clarivate’s Science business.” Indeed, the third speaker on the investor call was Mukhtar Ahmed, president of Clarivate’s science group. That works for content, but not so much for library technology. This is more likely to remain a separate business unit.

Consolidation among companies that provide products and services to the library community is nothing new. Mergers and acquisitions are a fact of life, and librarians have coped with changes in suppliers before. The acquisition of ProQuest by Clarivate demonstrates the increasing influence of corporate perspectives, from the exigencies of financial markets to the money-first mentality of hedge funds. This particular behemoth will take time to understand and could lead to a re-evaluation of the role of publishers, researchers, and technology within the broader library context—a true wake-up call for all concerned.


Marydee Ojala is the editor-in-chief of Online Searcher magazine, chairs WebSearch University, and is Program Development Director for Enterprise Search & Discovery.

Email Marydee Ojala

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Comments Add A Comment
Posted By Nathan Curulla5/27/2021 10:12:00 AM

Consolidation is nothing new in the market, neither is the outrage expressed by libraries when the situation gets worse. The question is when will the outrage result in change? There are Open Source alternatives out there that are a match in terms of functionality and are directly in line with the ideals and morals of the institution of libraries but for some reason the library community is still way behind on the adoption of these alternative software architectures. It is time to start voting with your feet!

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