Thomson Reuters Buys Casetext To Up The AI Game

Thomson Reuters Corp TRI inked a deal to acquire Casetext for $650 million in cash.

Casetext is a California-based technology provider for legal professionals and uses advanced AI and machine learning to aid them in offering higher-quality representation to clients. 

The acquisition will complement Thomson Reuters' AI roadmap and build on its recent initiatives.

Notably, TRI's recent endeavors include a planned investment of over $100 million annually on AI capabilities, the creation of new generative AI experiences across the product suite, and a new plugin with Microsoft Corp MSFT 365 Copilot for legal professionals.

The transaction is expected close in H2 2023, subject to regulatory approvals and customary closing conditions.

"The acquisition of Casetext is another step in our 'build, partner and buy' strategy to bring generative AI solutions to our customers. We believe that Casetext will accelerate and expand our market potential for these offerings - revolutionizing the way professionals work, and the work they do, said Steve Hasker, president and CEO.

Last month, Thomson Reuters reported first-quarter FY23 revenue growth of 4% year-on-year to $1.738 billion, missing the consensus of $1.740 billion, and adjusted EPS of $0.82 topped the consensus of $0.79.

Thomson Reuters generated $133 million in FCF and held $1.69 billion in cash and cash equivalents at the end of Q1 FY23. 

Price Action: TRI shares are trading higher by 1.18% at $135.17 on the last check Tuesday.