Thomson Corp. to Acquire Primark
Paula J. Hane
Posted On June 12, 2000
Just a few months after purchasing Dialog Information Services, Thomson Corp. (http://www.thomson.com) has shown that it's still determined to add to its electronic information resources via acquisition. The company has announced a merger agreement under which Thomson will acquire Primark Corp. (http://www.primark.com) for $842 million in cash (for Primark stock) and assume $235 million in Primark debt—adding up to a $1.1 billion purchase. (For comparison, the Dialog purchase only cost Thomson $275 million.) But Thomson has deep pockets and will have even more available resources after it sells off the 130 newspapers it now has on the market.
If you're trying to recall the Primark name, you may find its key brands to be more familiar to you. These include A-T Financial, Baseline, Disclosure, Datastream, Global Access, GlobalTOPIC, I/B/E/S, MarketEye, PIMS, WEFA, Worldscope, and Vestek. Primark is a global provider of financial, economic, and market-research information and, according to the company, serves "financial, corporate, and government decision makers in 61 countries through 86 offices in 24 countries."
"With the acquisition of Primark, Thomson is taking another significant step to strengthen its global information offerings—in particular, the content and software applications we provide to the financial services market," said Richard J. Harrington, president and CEO of Thomson Corp. "Primark's extensive data, analytical tools, and work-flow solutions are extremely complementary to our existing products and will provide significant added value to Thomson's current customers. In addition, Primark's strong European and international operations will greatly expand Thomson Financial's global presence and capabilities—a key requirement to service these high-growth market opportunities."
"We are extremely excited to be adding a company of Primark's caliber to the Thomson Financial family," said Patrick J. Tierney, president and CEO of Thomson Financial (http://www.thomsonfinancial.com). "Primark's highly regarded analytical product range and innovative desktop applications will enhance our offerings to the fund-management, investment-banking, and brokerage communities, and provide new and far-reaching channels for distributing our broad content offerings. We look forward to working with the Primark team to provide our customers with an expanded portfolio of products and services."
Usually, with shrinking numbers of competitors, customers wonder about the lack of pricing pressures in the marketplace. However, with the current downward trend of the cost of information, this may not be a problem. In addition, customers should reap the benefits of dealing with fewer platforms, product offerings, and customer service points. Tierney indicated that Thomson Financial's customers want more integrated product offerings. He said that users should expect to see a richer mix of products from the merged companies, and be able to experience more one-stop shopping for their information needs.
Marsha Fulton, of Arthur Andersen & Co., admitted that dealing with fewer companies for licensing information products would be a plus, but that her company also doesn't want to see too few players in the marketspace. Not only will she keep an eye on pricing but she'll also be watching closely for product integration, since it sometimes feels as if Arthur Andersen is buying the same content from different sellers in the same organization.
Downplaying media reports about company and product rivalries, Tierney stressed that the companies' products, services, and strengths are very complementary. For example, he noted that Thomson's First Call is strong on the research-distribution side and in the U.S. market, while Primark's I/B/E/S is stronger on quantitative data and in the European market. He indicated that it was too early to discuss any specific plans for the company's products, but that integration teams would start working on this within a week or so. While the Primark transaction is expected to be completed during the second half of the year, it's subject to some conditions and regulatory approvals.
Joseph E. Kasputys, Primark's chairman and CEO, will become chairman of Thomson Financial. "We strongly believe that Thomson Financial, with its industry expertise, world-class content, and significant resources, is the ideal partner for Primark. Shareholders, customers, and employees of both organizations will realize exceptional benefits from this combination," he said. Indeed, the company's stock price, which had been lagging considerably, bounded upward on the news.
Just 2 days after the merger agreement was announced, Primark rolled out its new Web product, PiranhaWeb (http://www.piranhaweb.com), which allows users to search and screen across Primark's financial databases, such as A-T Financial, I/B/E/S, Disclosure, and Worldscope. Data from other suppliers, such as Compustat, IDC, and SEC, can be used as well. PiranhaWeb also provides a Microsoft Excel Add-in to allow tracking and analysis and offers links to Primark's Global Access.
Primark, while reporting 1999 revenues of $495 million, is still a relatively small company that has been struggling to re-engineer itself to compete in a Web world. (See the interview with Kasputys on page 1 of the April 1999 issue of Information Today.) From early 1997 until June 1998, the company was in serious discussions with several prospective buyers, including Reed Elsevier, which then withdrew its offer while it dealt with its possible merger with Wolters Kluwer. The Globe & Mail has now reported a rumor that Thomson may also be interested in Wolters Kluwer or even Pearson.
Thomson's 1999 revenues were $5.8 billion with Thomson Financial's share amounting to $1.5 billion. The Financial Times pointed out that the merged company of Thomson Financial and Primark, with revenues of about $2 billion, would be as big as all of Dow Jones. This acquisition strengthens Thomson's competitive position against companies like Reuters, Dow Jones, and Bloomberg, and also bolsters its Web initiatives. It's very likely that we haven't seen the end of Thomson's acquisitions as it continues its aggressive push to be what it claims is a "leading global e-information and solutions company."