Anglo-Dutch publisher Reed Elsevier said Tuesday that it reached an agreement to acquire Mead Corp.'s Lexis/Nexis on-line information operation for $1.5 billion in cash.
Reed Elsevier said it will acquire the assets of Mead Data Central, which operates the Lexis/Nexis legal and business publishing business. The acquisition also includes Michie Co., a leading U.S. state law publisher.
"This acquisition is a perfect strategic fit for Reed Elsevier," company Chairman Pierre Vinken said in a statement.
Reed Elsevier will finance the acquisition from surplus cash and $1 billion in further borrowings, the companies said.
The Mead Data Central unit last year posted an operating profit of $68 million on $551 million in revenue, and in the first eight months of this year it generated $58 million in operating profit on revenue of $406 million, Reed Elsevier said.
Mead said earlier that it was selling the publishing operation to focus on its core forest products business.
"We are pleased that the value of this unique asset has now been successfully unlocked for the benefit of Mead shareholders," Mead Chairman Steven Mason said in a statement. "This is a time of tremendous opportunity for Mead in the forest products industry."
The sale is subject to U.S. antitrust clearance and is expected to close by Dec. 31, the companies said.