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Reed Elsevier's acquisition trail takes it down risky pathsPosted at 8:43AM Thursday 15 Jul 2004 Reed Elsevier, the Anglo-Dutch information group, has money to burn. The company generates a little under £400 million a year — after paying dividends — which it wants to use for acquisitions. Yesterday it spent the annual budget in one glorious go, buying snoopers' database Seisint for $745 million (£401 million), the largest single deal that the company has struck since it bought Harcourt, the educational publisher, in 2001.Acquisitions are, of course, fun, and Reed is a company big enough to have its own M&A department to help it to scour and complete deals without the bind of paying bankers' fees. But they bring risk. Reed is offering a prospective dividend of only about 2.5 per cent, so investors need to be absolutely sure that the company knows what it is doing with their capital. If Reed decided to return the surplus cash, the yield would double.
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