Thomson Reuters (TSX: TRI, NYSE: TRI) announced the sale of its Intellectual Property and Science (IP&S) division to Onex Corporation and Barings Private Equity (Asia). The purchase price is US$3.55 billion, payable in cash. The transaction, which is subject to regulatory clearance and normal closing conditions, is expected to conclude in the next few months.

The IP&S division contributed about 10% of the company’s operating profit in 2015, with an EBITDA (earnings before interest, taxation, depreciation and amortization) profit of $313 million. This implies that the transaction multiple was around 11.4 times, which was somewhat higher than our estimate.

The company intends to use the proceeds from the transaction to repurchase shares, reduce debt and reinvest in the business. The company has a current authorization to spend $1.5 billion on share buybacks, which implies that they can repurchase another 3% of shares outstanding at current prices.

The balance sheet is in reasonable shape, with a debt-to-capital ratio of 39%. However, the company may find it useful to reduce some of the more expensive debt in its $8.6 billion debt pool.

The sale of the IP&S division will leave a profit hole, which won’t be filled entirely by the interest savings from debt reduction or a lower share count. The current financial year will also be somewhat messy because the IP&S division will now be reported as a discontinued operation.

Based on consensus estimates for 2017, Thomson Reuters is trading at a forward price-to-earnings (P/E) ratio of 17 times, and an EV/EBITDA (enterprise value to earnings before interest, taxation, depreciation and amortization) ratio of 9.1 times, which is more or less in line with its global peers. The stock currently yields an attractive 3.2%, and our fair-value estimate is C$54, or US$41.

Shawcor Ltd. (TSX: SCL, OTC: SAWLF) announced that it won a C$300 million contract to provide pipeline coatings for the Texas-Tuxpan offshore gas pipeline project. At the same time, the company said that it does not expect to participate in the pipe coating for the European Nord Stream 2 pipeline project.

Analysts expect Shawcor to deliver poor results this year. However, in the company’s second-quarter earnings release, management noted that Shawcor’s project backlog now totals in excess of $2.0 billion, an all-time record for the business. So while the failure to close the Nord Stream 2 contract is disappointing, the Mexican contract is a positive, and we may see further good news from other bidding activity.

Profits should recover in 2017. And based on consensus estimates, the forward EV/EBITDA (enterprise value to earnings before interest, taxation, depreciation and amortization) ratio stands at 7.5 times, which does not appear expensive. The stock currently yields 2%, and our fair-value estimate is C$35, or US$27.