REED ELSEVIER, the Anglo-Dutch publishing giant, said yesterday it had snapped up the US data services group Seisint in a deal worth $775m (pounds 417m).
Reed said Seisint - which provides details and analysis of public records, enabling companies and the US government to gather information about US citizens - would be subsumed by its wholly owned subsidiary Lexis Nexis, Reed's legal and government information arm. The group said the fit between the two businesses was "very strong", and would provide Reed with a firm foothold in the US risk management market.
In a statement yesterday, the group said the sector was already worth pounds 5bn, and has been "growing at 7 to 9 per cent per annum over the past 10 years, and has highly attractive future growth prospects". It added that Seisint is projected to grow revenues by more than 40 per cent this year, and that the business would contribute to Reed's earnings within the first year of its integration.
Analysts gave the deal a luke-warm welcome, saying that at $775m, equivalent to 16 times earnings, Reed had paid a high price for the firm. The sector average is about 10 times earnings. However, they added that the deal could prove to be a good move for the company if its strong growth continues. …