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Thomson to Buy Online Firm

Media: Toronto-based newspaper company will pay $3.43 billion to acquire legal-information provider West Publishing.


Thomson Corp., a Toronto-based publisher that owns the San Gabriel Valley Tribune and Pasadena Star News, continued its march into electronic territory Monday by announcing plans to buy West Publishing Co., a leading publisher of online legal information, for $3.43 billion.

Thomson has been pushing aggressively during the last few years into electronic publishing in such areas as law, accounting, medicine, engineering and financial services. About half the company's $7 billion in annual revenue is generated by electronic and specialty publishing, which was a tiny part of its business only a decade ago.

Thomson President W. Michael Brown said the purchase of West Publishing will boost the combined companies' standing in the competitive legal publishing industry.

"Joining forces with West is of major strategic importance to us," Brown said. "Together we will be well-positioned to provide lawyers and the judiciary with fully integrated research products and innovative practice management tools far beyond what either of us could have developed separately."

West Publishing, a privately held company based in Eagan, Minn., is known for its Westlaw online research service and its database of "primary law" products, including statutes, cases, codes and regulations, which are available in print, online and on CD-ROM.

Thomson is best known for its "secondary law" products that organize and analyze primary legal sources. Thomson Legal Publishing, which operates out of Rochester, N.Y., includes such names as Lawyers Cooperative, Clark Boardman Callaghan, Bancroft-Whitney, Barclays and Counterpoint Publishing.

Dwight Opperman, West Publishing chairman and chief executive, who will remain with the company along with other top executives, said the merger will enable West to operate more effectively in the increasingly competitive legal publishing industry, which has been roiled by mergers, notably the $1.5-billion acquisition of West's biggest competitor, the Lexis-Nexis system, by Reed Elsevier in 1994.

That same year, Thomson bought Ziff Communication's Information Access operation and Medstat Group Inc. In December, Thomson agreed to buy SCS/Computer Inc., a St. Louis-based income-tax software developer.

Thomson, which maintains its U.S. headquarters in Stamford, Conn., is not alone among publishers in following the lure of selling information via computer. But it has been more aggressive than most in shedding its newspaper operations.

The company sold more than 40 newspapers in the last year, although it continues to publish about 100. Brown boasted Monday that the company derives less than 15% of its revenue from advertisers, compared with 90% a decade ago.

Thomson's flagship is Toronto's Globe & Mail, but most of its publications are relatively small. Thomson also operates a travel and tour company.

Stock market analysts praised the combination, but worried about the heavy debt Thomson is taking on to pay for West. Two Canadian bond-rating services downgraded some of Thomson's debt Monday.

"We see it as a good acquisition for them. Thomson will definitely realize a number of synergies by merging the two companies," said Tom Fairbrother, a financial analyst with Dominion Bond Rating Service in Toronto. "It's strictly the debt that concerns us."

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