WPP in exclusive talks with Bain Capital for purchase of majority stake in Kantar
WPP confirmed on Monday it is in exclusive talks with Bain Capital to sell its majority stake in Kantar to the Boston-based private-equity firm, following "press speculation."
The potential deal values the data, insights and consulting giant at $4 billion, according to WPP's statement that confirmed an earlier Bloomberg report.
"Bain Capital's proposal is subject to negotiation," the statement read. "There is no certainty that these discussions will result in a transaction involving Kantar. Any further announcement will be made as appropriate."
WPP declined to comment further. Kantar and Bain Capital did not immediately return requests for comment.
R3 co-founder and principal Greg Paull told Ad Age that the deal would make sense.
"This would be a logical move for [Bain Capital] to expand their insights base and connect into some of their other assets," Paull said. "The sector is buoyant right now with Nielsen also looking at strategic options."
Media research firm Nielsen began a strategic review of its business last year, employing financial advisors J.P. Morgan Securities and Guggenheim Securities to assess, among other options, a sale of the company. CNBC reported in April that Advent International and Apollo Global Management were among the bidders for Nielsen.
Apollo reportedly was also competing against Bain Capital in the final round of the auction for Kantar. CVC Capital Partners and Apax Partners were said to be early bidders for Kantar as well, but dropped out.
Following the release of its 2019 first-quarter financial report, WPP CEO Mark Read said the company continued to "make good progress" on its three-year turnaround plan. That turnaround has seen the formation of digital creative networks VMLY&R and Wunderman Thompson, the realignment of WPP's U.S. healthcare agencies with larger networks and the planned divestment of up to 80 percent of its 100 percent stake in Kantar.
"The previously announced sale process of Kantar is progressing well, in line with our expectations," Read said in April. "We are pleased with the level of interest in the business from high-quality potential partners."
As WPP looks to divest in Kantar, other holding companies are doubling down on their investments in data. Publicis Groupe bought Epsilon for $4.4 billion in April; IPG acquired Acxiom's marketing solutions business for $2.3 billion last year; and Dentsu Aegis Network bought data-marketing firm Merkle in 2016.
Jay Pattisall, a principal analyst at Forrester, covering advertising and marketing, told Ad Age that WPP could still "financially benefit" from maintaining its minority stake in Kantar, "especially if the new majority share-holder invests to grow the business."
It is unclear at this point what percentage of the stake Bain Capital will purchase if the deal is approved. WPP has maintained that it will keep at least a 20 percent stake in Kantar.
Pattisall said it is also unclear what pieces of the Kantar business Bain Capital looks to purchase.
"It’s a large organization containing retail data, market research, social listening, trends and more," he explained. "Given that WPP rebranded all of the Kantar groups under a single name within the last year, it's reasonable to speculate the discussion is about the entire Kantar organization, rather than specific components."