July 3, 1996
The following press release appeared on NETWORK2d-L today.
Chris Wren
Madison, Wisconsin
cgwren@wiscosninlaw.com
==========================================
Reed-Elsevier, the parent of LEXIS-NEXIS, and Matthew Bender announced
the creationof a 50/50 partnership to own and operate Shepard's today.
The full announcement follows.
The following was sent to the Amsterdam, London and New York Stock
Exchanges today
19/96 3 July 1996
REED ELSEVIER PLC ENTERS STRATEGIC ALLIANCE WITH TIMES MIRROR TO
ACQUIRE SHEPARD'S
Reed Elsevier plc and The Times Mirror Company announced today the
formation of a 50/50 partnership to own and operate Shepard's, the
premier US legal citation business which, as also announced today, The
Times Mirror Company has agreed to purchase from The McGraw- Hill
Companies, Inc. 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 US legal information
market.
Reed Elsevier plc owns Lexis-Nexis, the world's largest provider of
full text online information services in the legal, news, business and
government areas. The Times Mirror Company is the parent of Matthew
Bender & Co., Inc., the leading analytical legal publisher in the USA.
Earlier this year, the two companies entered into a long-term cross-
license agreement to offer Matthew Bender publications online through
the LEXIS service and to provide a significant portion of the LEXIS
caselaw database through Matthew Bender's print and CD-ROM products.
Mark Willes, Chairman, President and Chief Executive Officer of Times
Mirror said "Times Mirror and Reed Elsevier are outstanding companies
and this collaboration offers tremendous potential for strengthening
our current products and, as evidenced by this joint acquisition of
Shepard's, for developing exciting new services to meet the evolving
needs of the legal marketplace."
Herman Bruggink, Co-Chairman of Reed Elsevier plc, whose
responsibilities include the international development of Reed
Elsevier's legal business, said "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. Our expectation is that
Reed Elsevier's share of the projected operating profit of the
partnership will exceed the attributable financing cost from the
outset, before taking into account revenue and cost synergy benefits
from the acquisition and the associated restructuring costs."
After Times Mirror acquires Shepard's, it will contribute the Shepard's
business to a partnership and Reed Elsevier plc, through its US
subsidiary, Reed Elsevier Inc, will acquire a 50% interest in the
partnership which will own and operate Shepard's. The partnership will
be managed by a Management Committee comprised of three representatives
of the Times Mirror Company and three representatives of Reed Elsevier
plc. Herman Bruggink, Co-Chairman of Reed Elsevier plc, and Mark
Willes, Chairman and Chief Executive Officer of Times Mirror, will be
the Co-Chairmen of this Committee.
Shepard's achieved revenue of $86.3 million and earnings before
interest and tax of
$40.7 million in the financial year ended 31 December 1995 and the net
assets at that date amounted to $24 million. Shepard's provides a
comprehensive mix of Federal and State jurisdictional and topical
Citator services delivered in print, on CD-ROM and online.
"Shepardizing" is a key process for all US lawyers faced with checking
the continuing validity of a case or statutory reference in light of
subsequent legal changes. Shepard's has grown strongly with the
expansion of the legal profession in the US and provides "must have"
information to practitioners. The company is located in Colorado
Springs, Colorado.
Times Mirror has agreed to acquire Shepard's from McGraw-Hill in
exchange for The Times Mirror Higher Education Group and other
undisclosed consideration. The Times Mirror Higher Education Group is
the fifth leading college publisher and had revenue of $227 million in
1995 and operating profit of $15 million in 1995.
Ira Siegel, President and Chief Executive Officer of Lexis-Nexis said
"Shepard's provides an important service to the legal community. The
substantial revenue and cost synergies which exist amongst Matthew
Bender, Shepard's and Lexis-Nexis will lead to significantly improved
product offerings to this expanding marketplace."
Kathryn M Downing, President and Chief Executive Officer of Matthew
Bender said "Our product offerings will contain the most authoritative
and comprehensive information available to the legal market. Matthew
Bender's outstanding legal analysis products combined with Shepard's
essential citation services and the Lexis collections of caselaw will
represent a unique and special array of information resources for our
customers".
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