IRI approached at least one potential acquirer earlier this month, when Chap-Cap Partners, a California hedge fund led by Robert L. Chapman, also announced it had acquired a more than 5% stake and demanded IRI be sold or Chairman-CEO Joseph Durrett be fired.
IRI has retained Chicago investment-banking firm William Blair & Co., the executives said. An IRI spokeswoman would not comment on the sale and said, "Joe Durrett has no plans to resign." Executives for Blair did not return calls for comment.
Mr. Chapman has a long history of pressuring boards to sell companies he believes are undervalued or poorly run. He told Advertising Age last week that he won't launch a proxy fight to oust IRI board members if he believes they're trying to sell the company.
IRI is the second major market-research firm in as many months to go on the market, after Interpublic Group of Cos. announced last month it wants to divest NFO WorldGroup.
Potential IRI acquirers include financial groups and the research firms Taylor Nelson Sofres, based in the U.K., and Ipsos, based in France, according executives familiar with the industry.
IRI reeled following the news in December that its largest client, Procter & Gamble Co., would shift its U.S. retail-measurement business, valued at $25 million to $30 million a year, to VNU's ACNielsen Corp. IRI shares closed at $1.48 on Feb. 21, down more than 50% since the P&G loss and 85% since May.
One executive familiar with the situation said Mr. Durrett originally approached potential buyers early last year but apparently found no takers, well before the P&G loss and when shares sold for $5 to $10.
IRI's current market capitalization is under $45 million on annual sales of more than $555 million and well under the $2.3 billion VNU paid for ACNielsen in 2001. But concerns about making IRI profitable, particularly after losing P&G, could deter buyers, said one executive familiar with IRI.
According to another industry executive, P&G has told ACNielsen and IRI it wants them to double their consumer panels, now 60,000 to 70,000 members strong.
A P&G spokeswoman said the company asked data providers to develop an "accurate and comprehensive" solution for retail data, but added "we've not been prescriptive on how they should do that."
Panel data have become more crucial since Wal-Mart Stores stopped giving syndicators scanner data in 2001. But doubling panels is costly and deeper-pocketed VNU-or a new IRI owner-may be better able to afford to do it.