Carlyle Buys Claritas From Nielsen, Installing Team From Catalina Venture

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Private-equity player Carlyle Group has agreed to acquire the Claritas market segmentation business from Nielsen, installing a ready-made top management team that left the Nielsen Catalina Solutions joint venture last year.

Mike Nazzaro
Mike Nazzaro Credit: Indian Hill Group

The move appears to signal renewed interest in marketing analytics from the publicly held buyout firm Carlyle, which was among players taking a major stake in Nielsen in 2006 but has sold much of that in public offerings over the past five years.

The Claritas deal culminates a yearlong process in which former Nielsen Catalina CEO Mike Nazzaro began sifting through more than 100 potential candidates. He and three other top members of his former Nielsen Catalina management team operated under the name Indian Hill Group with the backing of Carlyle and will head the newly independent company.

Terms of the deal weren't disclosed, including the size of Claritas, though Mr. Nazzaro said in an interview that the syndicated market segmentation business has thousands of clients, many of which have stayed more than 10 years. Offices in Ithaca, N.Y., and San Diego will remain, though Mr. Nazzaro and others in his top management team will remain in Cincinnati, where they were based with Nielsen Catalina, and build out a larger operation there.

Mr. Nazzaro said his team focused on finding established analytics players with more of a "private-equity focus" on stable businesses that could be energized with new investment rather than earlier-stage marketing-tech companies sought after by venture-capital funds.

His Nielsen Catalina experience convinced him of rising demand for data and analytics to inform, target and measure the efficacy of marketing. But the veteran of Procter & Gamble Co. -- who helped found consumer feedback website in 1999 before it ultimately merged with online buzz measurement firm Intelliseek and later was acquired by Nielsen -- also has been looking to expand beyond packaged goods.

Claritas, founded in 1971 and known among other things for its widely used PRIZM segmentation model, fit the bill. The business was "a little sub-optimized" at Nielsen, Mr. Nazzaro said, in part because it focuses mainly outside CPG, where much of Nielsen's analytics focus lies.

Nielsen, which acquired Claritas in 2009, is exiting because, "we want to simplify our product portfolio and focus on our core strengths," said Karthik Rao, president-expanded verticals for Nielsen, in a statement. "We determined that Claritas would be better suited as an independent company."

Mr. Nazzaro called Claritas "a crown jewel in the segmentation space" seeing greater use with the rise of programmatic digital ad buying. "We feel like this area is ripe for innovation," he said.

PRIZM's 66 segments are based on such things as income, education, life stage and location, with such names as "Beltway Boomers," "Country Squires" and "Pools & Patios." They're matched against individual marketer customer data to help target the most promising ZIP codes or addresses.

While the initial focus is Claritas, Mr. Nazzaro didn't rule out related acquisitions. "Carlyle is a tremendous partner," he said. "If the opportunity presents itself to add to what Claritas does, we would consider those things."

A statement from Carlyle Group managing directors Adam Glucksman and David Stonehill said, "The big data revolution has created rising demand for consumer insights, and Claritas is benefiting from that trend."

Carlyle, with more than $169 billion in assets across 125 funds and 177 "fund of fund" vehicles, has considerable holdings in business and data services, including shopper and in-store marketing. This includes one of the nation's largest brokerage firms in Acosta. It retains a stake but sold controlling interest in ad production-services firm Talent Partners in 2015, which it acquired a year earlier.

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