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The video and TV ratings giant Nielsen has been sold to a consortium of private equity firms, led by Evergreen Coast Capital Corp. (an affiliate of Elliott Management) and Brookfield Business Partners, in an all-cash deal that values the company at $16 billion, inclusive of debt.
Nielsen, led by CEO David Kenny, had rejected an $14 billion offer from the companies just a week ago, saying it “significantly undervalued” the company, but it accepted the higher bid on Tuesday. Tuesday’s bid was for $28 per share, well above the $25.40 per share in the prior offer.
“After a thorough assessment, the Board determined that this transaction represents an attractive outcome for our shareholders by providing a cash takeout at a substantial premium, while supporting Nielsen’s commitment to our clients, employees and stakeholders,” said James A. Attwood, chairperson of Nielsen’s board of directors, in a statement. “The Consortium sees the full potential of Nielsen’s leadership position in the media industry and the unique value we deliver for our clients worldwide.”
While Nielsen has had measurement struggles in recent years, Brookfield and Elliott said that the company is nonetheless “well positioned to be the leader in cross-media measurement as audience viewership behavior continues to evolve.”
“After months of deep market analysis, industry diligence and management reviews, we are firmly convinced that Nielsen will continue to be the gold standard for audience measurement as it executes on the Nielsen ONE roadmap,” said managing partner Jesse Cohn and senior portfolio manager Marc Steinberg on behalf of Evergreen and Elliott. “Having first invested in Nielsen nearly four years ago, we have a unique appreciation for the Company’s ongoing relevance to the global, digital-first media ecosystem. Today’s outcome represents a significant win for Nielsen’s shareholders and for the business itself, as our multibillion-dollar investment will help Nielsen reinforce its transformation at this critical inflection point. We are pleased to partner with David and the existing management team to lead Nielsen after the transaction is completed.”
The sale comes just a few weeks ahead of the TV upfronts, where, historically, major broadcast networks would pitch their new programming to advertisers and media buyers. This year’s upfronts are also expected to have a heavy focus on streaming, with companies like Disney, NBCUniversal and Paramount making ad-supported streaming a top corporate priority.
Nielsen had been the gold standard of TV measurement for decades, with its TV panel ratings long serving as the “currency” for TV advertising, the metric that advertisers, media buyers and networks agree represents viewership of a given TV show. That includes broadcast TV and cable networks, such as Paramount Network (home of the hit show Yellowstone).
However, the rise of streaming and mobile video has challenged the company, with its clients calling it out for its slow response to streaming. The company has been trying to speed up its integration of streaming data into media planning products, but in the meantime, a number of major TV companies have inked partnerships with other data providers to try and develop an alternative currency.
Nielsen admitted last year that it undercounted out-of-home viewers and had other measurement problems during the COVID-19 pandemic and has been trying to work through them. The Video Advertising Bureau, a trade group that represents the major TV networks, has asked Nielsen to delay adding some of its new measurement data, arguing that it has inconsistencies.
The deal is expected to close in the second half of 2022, though Nielsen will have a 45 day “go-shop” period, where it can solicit bids from other potential buyers.
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