Times Mirror to acquire a unit of McGraw-Hill Deal for Shepard's valued by analysts at $450 million


LONDON -- Times Mirror Co. said yesterday it will acquire Shepard's, a U.S. legal publication business, from McGraw-Hill Cos. in exchange for its higher education publishing unit in a transaction analysts value at $450 million.

Times Mirror also will pay McGraw-Hill an undisclosed sum.

Reed Elsevier PLC, an Anglo-Dutch publisher, said it will take a 50 percent stake in the partnership that will operate Shepard's after Times Mirror acquires it. Reed didn't say what it would pay for its half of the partnership.

"I estimate that Shepard's cost them roughly $450 million in all," said Andre Moons, an analyst at ING Barings Research. He added that Shepard's is "extremely profitable," with margins of "about 40 percent."

Colorado Springs, Colo.-based Shepard's posted a 1995 pretax profit of $40.7 million, on revenue of $86.3 million.

At year-end 1995, it had net assets of $24 million.

Paul Schram at Bank Bangert Pontier in Amsterdam said the acquisition would "immediately contribute to earnings."

He said Shepard's is a "must-have" product in the legal field.

"This is another step in what is expected to become a broad-based collaboration between Reed Elsevier and Times Mirror to pursue jointly new opportunities to expand in the U.S. legal information market."

Reed owns Lexis-Nexis, an online service providing legal, business and government news and information.

Times Mirror, a Los Angeles-based news and information company, is the parent of The Sun, the Los Angeles Times and other newspapers as well as Matthew Bender & Co., a U.S. analytical legal publishing company.

"By combining Matthew Bender's print and CD-ROM skills and Lexis-Nexis' expertise in online legal publishing and the Shepard's product, this partnership will generate far more value to both sets of shareholders than either company could have achieved by an outright purchase of Shepard's," Herman Bruggink, Reed's co-chairman, said in a statement.

Times Mirror stock lost 12.5 cents, to $43.875, on the New York Stock Exchange yesterday. McGraw-Hill lost 25 cents, to $45. Reed International shares closed up 13 pence at 1,082p in London, while Elsevier NV shares rose 0.2 Dutch cents, to close at 25.7 guilders, in Amsterdam.

Pub Date: 7/04/96

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