Thomson Reuters (TSX/NYSE: TRI), a prominent global content and technology enterprise, has announced the execution of a definitive agreement to divest its FindLaw business to Internet Brands, an integrated online media and software services company specializing in high-value vertical markets, particularly in the Health and Legal sectors. This transaction marks a significant shift in Thomson Reuters’ approach as the company pivots towards focusing on its most strategic business segments, divesting non-core assets such as FindLaw to companies better positioned to grow them.

FindLaw, a leading platform providing legal assistance and marketing solutions for law firms over the past two decades, will transition to ownership under Internet Brands. FindLaw has established itself as a pivotal resource in the legal market, connecting individuals with attorneys and providing vital marketing services for law firms aiming to expand their client base. Internet Brands, with its sophisticated operational model and technological expertise, intends to enhance and expand FindLaw’s capabilities further, drawing on its extensive expertise in managing digital platforms with substantial consumer engagement, reaching millions of users monthly. The integration of FindLaw into Internet Brands’ existing ecosystem is expected to unlock synergies and deliver increased value to legal professionals and consumers alike.

This divestiture aligns with Thomson Reuters’ strategic objective to focus on its core competencies, such as legal, tax, and compliance services, and continue investing in advanced technology solutions like artificial intelligence and machine learning, which can drive innovation within these domains. Meanwhile, Internet Brands, headquartered in El Segundo, California, continues its expansion into critical vertical markets. The transaction is structured to ensure that existing FindLaw customers experience continuity in service and support, facilitating a seamless transition that prioritizes the customer experience during this period of change. Both parties have expressed their commitment to maintaining FindLaw’s high standards of service, emphasizing the importance of customer trust and satisfaction.

Internet Brands: A Dominant Force in Digital Health, Legal, and Beyond

Established in 1998, Internet Brands has evolved into a preeminent operator of digital platforms across sectors such as Health, Automotive, Legal, and Home/Travel. Its portfolio encompasses high-profile platforms like WebMD, Medscape, and the Henry Schein ONE network—all recognized as global leaders in their respective markets. Within the legal domain, Internet Brands operates well-known platforms such as Nolo, Avvo, and Martindale, collectively forming the largest consumer information network for legal advice and services. These platforms provide essential resources for consumers seeking legal guidance, as well as marketing and practice management solutions for law firms seeking to grow their businesses.

As a portfolio entity of private equity firms KKR and Warburg Pincus, Internet Brands reports over 250 million monthly visitors and maintains substantial partnerships with small-to-medium enterprises (SMB) as well as enterprise-level clients. This extensive reach underpins the company’s ability to leverage network effects and provide significant marketing opportunities for its partners. The company’s proprietary technology infrastructure facilitates operational scalability, ensuring sustained growth to support FindLaw’s integration and future development. By incorporating FindLaw into its portfolio, Internet Brands aims to strengthen its market position in the legal services sector and enhance its offerings to both consumers and legal practitioners.

The transaction, anticipated to close in the fourth quarter of 2024, remains subject to customary regulatory clearances. The closing of the deal will represent a key milestone for both companies, allowing Thomson Reuters to sharpen its focus on core growth areas while empowering Internet Brands to expand its legal services offerings comprehensively. Centerview Partners LLC acted as the exclusive financial advisor to Thomson Reuters throughout this transaction, providing critical support and ensuring that the terms of the divestiture aligned with Thomson Reuters’ strategic objectives.

Expert Perspectives: Strategic Realignment for Thomson Reuters and Internet Brands

Sector analysts assert that this divestiture presents a strategic opportunity for both Thomson Reuters and Internet Brands to sharpen their respective areas of focus. For Thomson Reuters, the sale of FindLaw is seen as part of a broader initiative to streamline its portfolio, divesting non-core businesses to better concentrate on areas that offer the greatest potential for innovation and market leadership. Thomson Reuters is expected to channel its resources towards its core service offerings and advanced technological initiatives, thereby reinforcing its competitive advantage in high-growth segments such as legal, tax, and regulatory technology. This streamlined approach is expected to improve operational efficiency, reduce complexity, and enhance the company’s ability to serve its target markets effectively.

Conversely, Internet Brands is well-positioned to leverage FindLaw’s established market presence, thereby bolstering its integrated legal services ecosystem. By integrating FindLaw with its existing platforms like Nolo and Avvo, Internet Brands aims to create a more cohesive and comprehensive suite of services that can meet the diverse needs of both consumers seeking legal help and the law firms providing those services. The enhanced scale and scope of Internet Brands’ legal offerings will also improve the company’s ability to invest in new technology and expand its reach within the legal community, ultimately benefiting both end-users and commercial partners.

This transaction signifies Thomson Reuters’ deliberate effort to streamline its business structure and concentrate its investments on high-growth initiatives, enhancing its ability to innovate within its primary domains. It also reflects a broader industry trend where companies are increasingly divesting non-core operations to focus on strategic growth areas. Internet Brands, backed by prominent private equity investors KKR and Warburg Pincus, emerges as an optimal partner to amplify FindLaw’s capabilities, owing to its demonstrated success in cultivating robust, consumer-centric digital platforms. The financial backing from these private equity giants provides Internet Brands with the resources necessary to make significant investments in the FindLaw platform, ensuring its continued growth and evolution in the competitive legal market.

  Centerview Partners, El Segundo, FindLaw, Internet Brands, KKR, Thomson Reuters, Warburg Pincus