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Blackstone Buys a Majority Stake in Financial and Risk Business

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Feb. 8 2018, Updated 11:10 a.m. ET

Partnership

The consortium managed by the Blackstone Group (BX) recently made an announcement regarding a partnership with Thomson Reuters (TRI).

The private player plans to take up a majority stake in TRI’s financial and risk business. GIC and the Canada Pension Plan Investment Board (or CPPIB) are also making investments in TRI’s financial and risk business.

According to the deal, the consortium will have a 55% stake in the Thomson Reuters–acquired business, and Thomson Reuters will have a 45% stake.

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About the business

The above-mentioned deal has been valued at $20 billion. The target business is a platform that contains data analytics and serves financial transactions. The platform also makes available risk management and regulatory solutions, aiding customers in terms of risk as well as compliance.

Blackstone’s management has a favorable outlook on the partnership. According to them, the transaction will be beneficial for BX’s investment partners. According to CPPIB’s management, the transaction will expand CPPIB’s portfolio. The deal will wrap up in 2H18.

Blackstone’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin for the last 12 months is 48.7%. Peers (XLF) Ares Management (ARES), Oaktree Capital Group (OAK), and Ameriprise Financial (AMP) have EBITDA margins of -13.4%, 32.1%, and 23.4%, respectively, on a trailing-12-month basis.

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