Thomson Reuters announces sale of healthcare division; unclear how it will affect 800-900 jobs in Ann Arbor
Thomson Reuters' healthcare division employs 800-900 workers at its offices in the former 777 Building on Eisenhower Parkway, near South State Street, in Ann Arbor.
It’s not immediately clear how the sale of the division for $1.25 billion to Veritas Capital will affect the company’s Ann Arbor operations. The new owner could decide to do any number of things, including expand, reduce, consolidate or move the operation.
Thomson Reuters, the second largest private employer in Washtenaw County, announced the sale Monday morning in a news release. The purchase, which is subject to regulatory approval, is expected to be finalized in the next few months, the company said.
Besides the 900 workers at the healthcare division offices in the former 777 Building on Eisenhower Parkway, near South State Street, the company employs up to 1,000 people at a tax and accounting division in Dexter.
Thomson Reuters put the healthcare division on the market last June, then temporarily suspended the effort in December. CEO Thomas H. Glocer said in a statement last June that the unit was "a growing and profitable unit" but said it "lacks the integration with and global scale of our other units" and that a sale would provide cash that could be reinvested in other parts of Thomson Reuters' expansive business.
Thomson Reuters' $450 million health care and science unit offers a variety of services, including analyzing health care costs and trends and consulting to help health care systems and insurers cut costs.
"The acquisition will provide us with a unique and exciting opportunity to add a truly outstanding business and world-class management team to our portfolio and we look forward to building upon our experience in the healthcare analytics market,” Robert McKeon, chairman of Veritas Capital, said in the news release. “We look forward to welcoming the business and its talented employees … into the Veritas family."
A corporate spokesman for Thomson Reuters suggested questions about how the sale will impact Ann Arbor operations would be best addressed by Veritas Capital. A woman who answered the phone at McKeon's office at Veritas on Monday afternoon said he was traveling and unavailable for comment.
Veritas Capital is a private equity investment firm headquartered in New York. According to a press release, it invests in companies “that provide critical products and services to government and commercial customers worldwide.”
Thomson Reuters, a global information services company, employs about 60,000 people worldwide and operates in more than 100 countries. It is headquartered in New York, but has major operations in London and in Eagan, Minn.
The news of the deal seemed to have little impact on Thomson Reuters' stock price. The company's stock (TRI) opened at $28.65 per share this morning on the New York Stock Exchange and was sitting $28.45 just before 2 p.m.
Comments
Townie
Sat, May 5, 2012 : 1:33 a.m.
Just watch. Put some lipstick on it, gut it and sell everything that isn't nailed down for a large profit. That's all that matters, right? The Bain model of 'free enterprise'. Take (steal) the money and run. Then run for president as a rich man and 'job creator'. Works for Mitt!
Sballalien
Tue, Apr 24, 2012 : 4:27 a.m.
Stirring up trouble where there is none. I am still a happy employee.
toofmullets
Tue, Apr 24, 2012 : 12:40 p.m.
I really liked what I heard Boswood say. The change is worrisome, but it sounds like there's some really great opportunity here.
Kai Petainen
Mon, Apr 23, 2012 : 9:13 p.m.
The chairman of the corporate governance board at ARX, is also the founder and chairman of Veritas capital. According to Aeroflex's website: "Mr. McKeon was selected to serve as one of our directors because he is the Founder and Chairman of our largest beneficial holder and has extensive experience and familiarity with us since the 2007 Going Private Transaction" http://tinyurl.com/89scvld And Veritas Capital owns 30% of ARX. So a major person at ARX, who happens to be the #1 shareholder just bought a portion of Thomson Reuters, and that deal would cost more than the marketcap of ARX. I tried asking ARX for a comment, they responded: "We do not comment on Veritas' activities."
Kai Petainen
Mon, Apr 23, 2012 : 7:17 p.m.
"The news of the deal seemed to have little impact on Thomson Reuters' stock price. The company's stock (TRI) opened at $28.65 per share this morning on the New York Stock Exchange and was sitting $28.45 just before 2 p.m" Although you mention TRI, it is somewhat incomplete... You forgot to mention.... that ARX is down -4%. Why does ARX matter? Because 30% of that is held by Veritas. http://finance.yahoo.com/q/mh?s=ARX+Major+Holders VGG is Veritas http://tinyurl.com/c9trbke Did the news have some impact on ARX's stock price?
Kai Petainen
Mon, Apr 23, 2012 : 7:57 p.m.
5 day chart, showing spkie in trades at 1:00 today. http://tinyurl.com/6v7lgav
Kai Petainen
Mon, Apr 23, 2012 : 7:56 p.m.
on a 5 day scale, the market (S&P 500) is down -1% ARX is down -7% although the market is down -1% today, ARX is down more than the market. also.. there was a spike in trading volume @ 1:00 today (usually spikes will occur at the beginning/end of the day)
janeqdoe
Mon, Apr 23, 2012 : 7:31 p.m.
The entire market is down today, not just ARX
HeimerBoodle
Mon, Apr 23, 2012 : 7:09 p.m.
Here's hoping the new owners at a minimum keep things "business as usual" or, better still, start investing in the business. For too long TR treated Healthcare like their "checkbook", using their profitability to buoy up other divisions while not reinvesting in the business or people. I'm sure this is neither here nor there, but the Veritas Capital website is shockingly light on information. Again, let's hope that's normal for this type of outfit.
sellers
Tue, Apr 24, 2012 : 11:01 a.m.
Are you sure? Do you have financial statements to support that theory ?
say it plain
Mon, Apr 23, 2012 : 6:28 p.m.
Clearly this story keeps getting updated with details that address some of the points/questions made by us commenters lol, but there isn't any indication being noted...
toofmullets
Mon, Apr 23, 2012 : 5:32 p.m.
Was any effort made to reach anyone who could comment on the uncertainty of the 800-900 employees?
toofmullets
Mon, Apr 23, 2012 : 7:25 p.m.
@hardworker - I was talking about the 800-900 that were addressed in the headline.
HardWorker
Mon, Apr 23, 2012 : 6:43 p.m.
What, is that a rethorical question or what? McKeon said that "We look forward to welcoming the business and its talented employees … into the Veritas family." So he referred to talented employees without the slightest mention to non-talented ones. Are you suggesting that the 800-900 employees you refer to are non-talented?
Kai Petainen
Mon, Apr 23, 2012 : 5:19 p.m.
Interesting link to Ann Arbor. McKeon is at Aeroflex (ARX), and that is in Ann Arbor. say what you want about it being in NY, but to me... this is also an Ann Arbor firm making the deal.
toofmullets
Mon, Apr 23, 2012 : 5:08 p.m.
The employees have been told nothing wtill change.
Sballalien
Tue, Apr 24, 2012 : 4:28 a.m.
This is true for many things, based on an announcement this morning.
JCK
Tue, Apr 24, 2012 : 12:17 a.m.
I highly doubt that. When a company is sold or even when a new CEO comes in, there's ALWAYS some kind of change. TIme will tell with this.
treetowncartel
Mon, Apr 23, 2012 : 4:15 p.m.
A venture capital firm will most likely leave the current operations alone. Over time, they will make efforts to increase profit and reduce costs, and then try and sell it for a profit. At that point, it might have an effect on the local employment scene.
SirCut
Tue, Apr 24, 2012 : 1:59 p.m.
FYI Veritas is a buyout firm not a venture capital firm. Both VC and buyout firms are private equity. VC's build companies.
sellers
Tue, Apr 24, 2012 : 11 a.m.
Don't be so sure. VCs like return on investment, and if they can find a way to return on investment, then they will do so. There is a good chance in situations like this that they will not try to "integrate" into another operation, unless they have a similar arm already (didn't verify portfolio)
say it plain
Mon, Apr 23, 2012 : 4:46 p.m.
Also, it was apparently an all-cash sale, which makes me think their intentions might include desire for some quicker cost-reduction/consolidation moves?
say it plain
Mon, Apr 23, 2012 : 4:34 p.m.
Hmm, but if you look at Veritas Capital, they have a portfolio already of government services analysis outfits, and it might make sense for them--if the new US Healthcare system keeps on rolling along--to move the whole kit and kaboodle in with some of their D.C. area operations? I only mean to say that this firm who bought Thomson Reuter's isn't necessarily just interested in an eventual sale but perhaps in consolidating aspects of their holdings as well...
say it plain
Mon, Apr 23, 2012 : 4:24 p.m.
That makes sense, and hopefully will be the case (that the jobs aren't lost all at once, that is!)... Maybe the eventual buyers will even use this area as a new base for expansion? One can hope!?