Buyout firm TPG to acquire majority stake in Elite from Thomson Reuters

By Milana Vinn

(Reuters) – Private equity firm TPG Inc said on Tuesday it has agreed to buy a majority stake in Elite, a vendor of business management software for law firms, from information provider Thomson Reuters (NYSE:) Corp at a valuation of $500 million.

Thomson Reuters will keep a minority stake and board representation in Elite and continue to support it with its legal information products, the companies said. The deal frees up cash for Thomson Reuters to invest in the development and upgrades of its other products.

Paul Fischer, president of Thomson Reuters’ legal professionals division, said that Elite will continue to share many of Thomson Reuters’ clients as a standalone company.

“We will make sure to partner very closely on the customer side and we will look into ways of how we can work together strategically also,” Fischer said.

Elite offers software that helps law firms run their finance and accounting operations, including billing, invoicing and payments.

TPG partner Tim Millikin said that the data and automation that Elite offers are in demand among legal professionals.

“Law firms use a lot of data to support their clients, but they also use data to do a lot of research and run their firms,” Millikin said.

The deal with TPG shares the same structure as a larger divestiture that Thomson Reuters completed in 2018, when it sold a majority stake in its financial information business to private equity firm Blackstone (NYSE:) Inc at a $20 billion valuation. Thomson Reuters also retained a minority stake in that business, which was called Refinitiv and was subsequently acquired by the London Stock Exchange Group (LON:) Plc for $27 billion in cash and stock.

TPG has a history of acquiring businesses from conglomerates. Such deals include the $4 billion purchase of Dell Technologies (NYSE:) Inc’s cloud business Boomi in 2021 and the acquisitions of majority stakes in the McAfee and Wind River software businesses of Intel Corp (NASDAQ:) in 2016 and 2018, respectively.

Thomson Reuters is the parent company of Reuters News. Thomson Reuters Chief Executive Steve Hasker served as senior adviser to TPG between 2019 and 2020, and between 2018 and 2019 he was CEO of one of TPG’s portfolio companies — talent agency CAA.