Reed to buy ChoicePoint and sell ad-driven division

By Gavin Haycock

LONDON (Reuters) - Reed Elsevier (REL.L: Quote, Profile, Research) will buy U.S. risk-management business ChoicePoint CPS.N for $4.1 billion (2.09 billion pounds), including debt, and sell an ad-dependent business that includes Hollywood trade paper Variety, the Anglo-Dutch publisher said on Thursday.

Reed shares jumped 7.5 percent to 641 pence, making it the best performing blue-chip stock on the London exchange.

The publisher of science journals, legal information and magazines also said it would intensify a cost-cutting drive as it reported a 2007 adjusted operating profit of 1.137 billion pounds, up 5 percent on 2006 and up 11 percent on a constant-currency basis.

ChoicePoint shares were trading 43 percent higher at $48.22 in afternoon trading on the New York Stock Exchange.

The $4.1 billion price tag comprises $3.5 billion in cash for the equity, at $50 a share, and $600 million in net debt.

The deal, spearheaded by Reed Chief Executive Crispin Davis, who said he had eyed up the U.S. company for a couple of years, marks his latest effort to move Reed from low-growth print-based volatile sectors to faster-growing online services in the legal, healthcare and financial industry.

Reed (ELSN.AS: Quote, Profile, Research) said by combining ChoicePoint with its LexisNexis database service, it will grab a leading position in the fast-growing market for personal data, and generate an estimated $1.5 billion in revenue.

Davis told reporters at a briefing in London that ChoicePoint's insurance business, which accounts for 82 percent of its profits, is the "jewel in the crown".