ST. LOUIS - Silverchair, a provider of software and services for scientific, technical, and medical (STM) content publishers, has announced a definitive agreement to acquire ScholarOne from Clarivate Plc (NYSE:CLVT). ScholarOne is recognized for its manuscript submission and editorial management software, serving scholarly publishers and societies. The financial terms of the deal have not been made public.
Silverchair, established in 1993 and headquartered in Charlottesville, VA, operates an extensive content management system, the Silverchair Platform. This platform supports over 400 publishers in managing, distributing, and monetizing their STM content. ScholarOne, also based in Charlottesville and founded in 2000, is instrumental in handling manuscript submissions for more than 600 publishers, processing over three million manuscripts and conference abstracts annually.
Will Schweitzer, CEO of Silverchair, emphasized the company's commitment to innovation and technology in fulfilling the scholarly promise. Schweitzer stated that this acquisition aligns with the long-term vision of Silverchair's founder, Thane Kerner, and will benefit from substantial investments to enhance the services for publishers, editors, and authors.
Josh Dahl, Senior Director of Product Management for ScholarOne, expressed enthusiasm about continuing to serve the scholarly publishing community. Dahl anticipates that the acquisition will allow for the development of technology platforms that meet evolving industry needs.
Representatives from Thompson Street Capital Partners (TSCP), the parent company of Silverchair, highlighted the potential to combine the technology platforms of both companies. Craig Albrecht, Managing Director at TSCP, sees the acquisition as an opportunity to introduce new products and services, delivering added value to customers throughout the scholarly publishing lifecycle.
Joe St. Geme, also a Managing Director at TSCP, conveyed excitement about uniting two industry leaders to create a comprehensive solution for publishers and association customers.
The acquisition is expected to be finalized within the fourth quarter of 2024, subject to customary closing conditions. This strategic move aims to enhance Silverchair's position in the market by expanding its offerings and fulfilling the needs of a broader customer base in the scholarly publishing sector. The information about this acquisition is based on a press release statement.
"In other recent news, Clarivate Plc reported Q2 revenue of $650 million, a net loss of $317 million, and an adjusted diluted EPS of $0.20. The company also announced a leadership transition, with outgoing CEO Jonathan Gear being succeeded by Matti Shem Tov, former CEO of ProQuest. Despite facing macroeconomic headwinds, particularly in the life sciences and healthcare segment, Clarivate noted growth in academia and government subscriptions and improvements in the intellectual property segment. In response to these recent developments, RBC Capital revised its outlook on Clarivate, maintaining its Sector Perform rating but decreasing the price target from $8.00 to $7.00. This adjustment was due to concerns about the CEO change, a slowdown in subscription growth, and challenges in recurring and transaction revenues. The firm also expressed skepticism regarding Clarivate's second-half 2024 organic growth forecast, which anticipates less than 2% growth. Despite these challenges, Clarivate has increased capital spending by $30 million, aimed at organic growth, and is balancing this with a capital allocation strategy that includes share repurchases and mergers and acquisitions. The company remains optimistic about its future growth, launching new products like the Epidemiology Intelligence platform and noting a positive turnaround at Derwent with expanded search capabilities."
InvestingPro Insights
As Clarivate Plc (NYSE:CLVT) prepares to divest ScholarOne to Silverchair, it's worth examining some key financial metrics that shed light on the company's current position. According to InvestingPro data, Clarivate's market capitalization stands at $4.74 billion, reflecting its significant presence in the information services industry.
One of the InvestingPro Tips highlights Clarivate's impressive gross profit margins, which currently stand at 66.04% for the last twelve months as of Q2 2024. This strong margin suggests that despite the upcoming divestiture, Clarivate maintains a solid core business with efficient cost management in its primary operations.
However, it's important to note that Clarivate has not been profitable over the last twelve months, with a negative P/E ratio of -24.57. This aligns with another InvestingPro Tip indicating that the company's short-term obligations exceed its liquid assets. The decision to sell ScholarOne could be part of a strategic move to streamline operations and improve profitability.
On a positive note, analysts predict that Clarivate will be profitable this year, which could signal a turnaround in the company's financial performance. This optimistic outlook may be influenced by potential cost savings and strategic refocusing following the ScholarOne divestiture.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 7 more InvestingPro Tips available for Clarivate, which could provide valuable context for understanding the company's financial health and future prospects in light of this strategic move.
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