Reed Elsevier to buy ChoicePoint

Anglo-Dutch publisher Reed Elsevier said on Thursday it had agreed to buy U.S. risk-management business ChoicePoint Inc for $4.1 billion in cash as it announced a package of cost-saving targets for the next three years alongside its 2007 annual results.

Reed said that combining ChoicePoint with its LexisNexis risk-information and its Analytics group would create a risk-management business with $1.5 billion in revenue and a leading position in a fast-growing market.

The London-based company said buying ChoicePoint at $50 per share had the unanimous backing of the U.S. company’s board and now required shareholder and regulatory approval.

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It also announced that it would divest its Reed Business Information arm to reduce its exposure to cyclical advertising markets. The Reed exhibitions business will be kept.

Reed, which recently returned $4 billion to shareholders following the sale of its education publishing assets, said it is targeting cost savings of 245 million pounds ($477.4 million) over 2008 to 2011 with annual savings of 100 million pounds by 2011.

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The restructuring of the business would incur costs of around 140 million pounds, Reed said as it announced that its adjusted operating profit was 1.137 billion pounds, up 5 percent on the previous year and 11 percent higher on a constant currency basis.

Revenue at the publisher of science journals, legal information and specialty magazines was 4.584 billion pounds, compared with an average forecast of 4.606 billion pounds.

Reed is raising the dividend 14 percent to 18.1 pence on adjusted earnings per share of 35.9 pence, up 12 percent on a constant currency basis.