VNU AGREES TO $10 BILLION ACQUISITION

Consortium of Buyers to Keep Market Research Giant Intact

By Published on .

CINCINNATI (AdAge.com) -- The supervisory and executive boards of VNU, a trade-magazine publisher and the leading global player in market research, has agreed to be acquired by a private-equity consortium for $10.3 billion in a deal that still faces possibly an uphill battle for shareholder approval.
Related Stories:
NIELSEN REJECTS PARTNERSHIP WITH ARBITRON
Will Not Use Personal People Meter to Measure TV
APOLLO MEDIA MEASUREMENT SERVICE LAUNCHES
Media Exposure and Purchasing Data Gathered From 5,000 Households
TRADE PUBLISHING GIANT VNU IN SALES TALKS
Has a Proposal From Consortium of Private-Equity Firms

The consortium of private-equity funds intends to keep VNU “largely intact” and pursue existing strategies, the company said in a statement. VNU argued that the deal multiple of 13.4 times normalized 2005 cash flow represents a premium over industry peers and historic prices for VNU stock, which has been trading at around the takeout price in recent weeks in anticipation of the deal.

Some call for breakup
But some VNU shareholders have been pushing for a breakup of the company, which they say could yield more value, according to published reports.

The deal includes $9 billion in cash and assumption of another $2.3 billion in debt by Valcon Acquisition, the private equity group made up of affliates of AlpInvest Partners, including Blackstone Group, Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners.

In anticipation of a deal, VNU has been busy tying up loose ends in recent weeks in its dealings with other research companies.

Last month, VNU agreed to a settlement of Information Resources Inc.’s 10-year-old antitrust lawsuit for $55 million, a small fraction of the $4.5 billion originally sought. Executives close to both companies said the impending sale of VNU prompted the settlement.

Ended Arbiton partnership
VNU also announced last week that it would end its partnership with Arbitron to use Portable People Meters for TV ratings, though the two companies still will collaborate on the Apollo project to use PPMs and VNU’s ACNielsen consumer panel to measure the impact of a broad range of advertising on consumer purchases.

VNU also owns Nielsen Media Research, the largest TV ratings service in the U.S. and globally, and trade magazines such as Billboard, Hollywood Reporter and Adweek. Some shareholders have advocated a three-way breakup of the company into separate units for media metrics, ACNielsen and publishing.

"Based on a long and careful analysis of various alternatives, including remaining a stand-alone company and breaking up the company, we concluded that this transaction best serves the interests of VNU's shareholders, clients and employees," said Aad Jacobs, chairman of VNU's supervisory board, in a statement.

No other offers exist
The company said no other offers currently exist for pieces of the business, which would lose economies of scale and tax benefits as standalone entities. Breakup of the company also would cause distraction and a negative reaction among clients with which VNU has been working to create combinations of its marketing, media and consumer information services, the company said.

The company said it anticipates CEO Rob van den Bergh, who previously announced he would step down following the thwarted attempt to acquire market researcher IMS Health last year, will leave upon closing of the deal.

In this article:
Most Popular