Thomson Reuters suspends efforts to sell Ann Arbor-based health care division
Information services giant Thomson Reuters today said it would abandon efforts to sell its Ann Arbor-based health care division until the market improves.
Thomson Reuters' health care division is based at the former 777 building on Eisenhower Parkway.
File photo | AnnArbor.com
The company's health care business employs between 800 and 900 workers at the former 777 building on Eisenhower Parkway. Its tax and accounting operation in Dexter, which was not part of the sale efforts, employs about 1,000.
In a press release this morning, Thomson Reuters said it would continue to operate and grow its health care division for now.
The company had announced in June that it wanted to sell the division by the end of the year, sparking speculation that it had already lined up a prospective buyer.
In September, reports emerged that India information technology firm InfoSys was close to acquiring the business — but the company denied its interest a month later.
"Since announcing the planned divestiture in June, global economic conditions have become more challenging and the company believes they are not conducive to concluding a transaction that reflects the fair value of the Healthcare business at this time," Thomson Reuters said today in a statement. "Thomson Reuters is committed to continuing to invest in and grow the Healthcare business until improved market conditions allow the company to complete a divestiture at attractive terms."
Thomson Reuters' $450 million health care and science unit reported 7 percent revenue growth in 2010, compared to 4 percent overall sales growth for the entire corporation. The health care division offers a variety of services, including analyzing health care costs and trends and consulting to help health care systems and insurers cut costs.
Thomson Reuters CEO Thomas H. Glocer said in a statement in June that the unit was "a growing and profitable unit" but said it "lacks the integration with and global scale of our other units" and that a sale would provide cash that could be reinvested in other parts of Thomson Reuters' expansive business.
Today, the company said the division "continues to perform well with strong revenue growth and expanding margins."
The health care unit will be integrated into the company's "other businesses" for the purposes of its financial reporting.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Ron Granger
Fri, Dec 23, 2011 : 2:17 p.m.
@HeimerBoodle: "The bottom line is there is still no long-term security for the employees." There is no long term security for any working class employees, anywhere. That includes the self-employed. Medium-term maybe. We're all one serious illness away from being in the street.
HeimerBoodle
Fri, Dec 23, 2011 : 2:50 p.m.
Oh absolutely. The point was that it's naive to think the "suspension" of the sale means anything aside from the uncertainty being prolonged and the business being used to bolster TR's other assets. TR has used Healthcare as a slush fund for the "pretty" children for a while. There's no reason to think that will stop or that they don't still intend on dumping the unit when they can.
HeimerBoodle
Fri, Dec 23, 2011 : 1:11 p.m.
If you read the linked story, you will see that TR has not "abandoned" their efforts to sell the business, they have "suspended" them. Meaning they couldn't get their asking price. They have no intention of holding on to the unit any longer than they can help it. The minute they find a buyer who will give them what they want, it will be sold. This is not a case of a company realizing that it should keep an asset, it's a case of them deciding it's more profitable to milk that asset for a while longer while they try and get rid of it. It's sort of like finding out the spouse who you thought was divorcing you couldn't find a new trophy wife quickly enough, so he's sticking around and demanding that you cook and clean for him. The bottom line is there is still no long-term security for the employees. The waiting period and uncertainty have simply been prolonged. Here's hoping for their sake that TR really does continue to invest in Healthcare and treat folks well while they shop the business around.
Michael K.
Fri, Dec 23, 2011 : 6:05 a.m.
No offense folks, but I **would not** be so quick to assume this is good news. Maybe in the short, short term. But if TR needs capital to grow, and the opportunities - and margins - are better in their other businesses ( else why sell), and they can't sell to raise capital - Then it is time to cut costs, restructure, and "repurpose assets" across the organization. When Ford went "back to basics" 10 years ago, they shuttered and broke off and sold off many profitable businesses - and that was during a good economy! You would be amazed at the type of proposals that are brought into the board room. And the real uncertainty, until all is said and done, of what comes out of that meeting ... Especially if some unexpected bad news turns up in the books
omniskeptic
Thu, Dec 22, 2011 : 10:16 p.m.
All usual snarkiness and sarcasm aside, this is indeed very good news for Ann Arbor and a large number of people.
JGS
Thu, Dec 22, 2011 : 7:52 p.m.
Is this division still called Medstat? DataProbe much? :)
omniskeptic
Thu, Dec 22, 2011 : 10:14 p.m.
No. It's called Thomson-Reuters Healthcare. It's a combo of two older Ann Arbor companies, Medstat and Solucient -- the latter has roots that go all the way back to CPHA.
thefoodandwinehedonist
Thu, Dec 22, 2011 : 8:22 p.m.
I think they dumped the Medstat name for good in 06. Data Probe? Man, you're dating yourself....
thefoodandwinehedonist
Thu, Dec 22, 2011 : 5:58 p.m.
Makes sense since they're making money and healthcare is monster industry that's continuing to grow. Happy for some of my former coworkers there. Some of the others can still go to heck...
Ron Granger
Thu, Dec 22, 2011 : 5:23 p.m.
On behalf of my friends who work there, YAY!
deletedcomment
Thu, Dec 22, 2011 : 7:37 p.m.
I have family there! Good news indeed.
xmo
Thu, Dec 22, 2011 : 4:51 p.m.
Another Pfizer?