Reed Elsevier puts pieces of Reed Business Information on the block, RBI U.S. CEO Tad Smith resigns
London—Reed Elsevier announced Thursday that it is putting a large portion of its Reed Business Information U.S. unit back on the market.
The company had pulled the business off the market in December 2008 after bids for the unit fell from about $2 billion to $1 billion.
Additionally, Reed Business Information global CEO Keith Jones said in an internal memo that Tad Smith has resigned as CEO of RBI U.S. John Poulin was named interim CEO for RBI U.S., according to the memo. Poulin will continue as CFO of RBI U.S.
Jones said that Reed Elsevier plans to keep some of the stronger and most recognized pieces of the RBI U.S. portfolio: Reed Construction Data U.S. & Canada, RS Means, Variety, Marketcast, LA411 and Buyerzone. All of the other publications and services in the RBI U.S., as well as the related titles and services in Asia, will be on the block.
Reed Elsevier made the announcement about putting RBI U.S. up for sale during its report on its interim results for the first half of 2009. The company said that its revenue increased 25% to $5.05 billion compared with the first half of 2008. In constant currencies, the revenue growth was 3%. The company's operating profit declined 36% in the first half of 2009, falling from $739 million to $521 million.
Revenue and profits were impacted by severe downturns in marketing expenditures. Reed Exhibitions' revenue declined 22% to $763 million and its profits fell 26% to $196 million. Similarly, Reed Business Information's global revenue fell 17% to $587 million and its profits fell 43% to $64 million.
Reed Elsevier said that the sale of RBI U.S. is necessitated by the $8.4 billion debt the company currently has in its books thanks in part to its $4.1 billion acquisition of ChoicePoint. “Last year's acquisition of ChoicePoint and the terminated sale of RBI have given us more debt than is prudent in current economic conditions,” said Anthony Habgood, chairman of Reed Elsevier, in a statement.
“With this timing, you could look at this as a calling of the bottom. It will take six months to get a deal done, so the timing is right. By the time they actually close these deals, the economy will be in better shape and they can start to command better prices for these properties,” said Ed Fitzelle, managing director at Whitestone Communications.