Nielsen is being acquired for $16 billion, including debt, about a week after the media measurement firm rejected a more modest offer earlier this month.
Visualizing the data collected by Nielsen plays an important role in determining where billions of advertising dollars are spent each year. The company itself has annual worldwide revenue of approximately $3.5 billion.
A group of private investors led by Evergreen Coast Capital Corp., a subsidiary of Elliott Investment Management LP, and Brookfield Business Partners LP along with institutional partners will pay $28 for each Nielsen share outstanding.
Brookfield Business Partners will invest approximately $2.65 billion via preferred stock, convertible into 45% of Nielsen common stock. The stock version of the deal is worth just over $10 billion in cash, with the rest being debt held by Nielsen.
Brookfield said Tuesday it plans to invest about $600 million, with the remaining balance funded by institutional partners.
New York-based Nielsen Holdings Plc declined the group’s previous offer, saying it had significantly undervalued the company. That offer was worth $25.40 per share, or about $9 billion before debt assumption. After accepting the revised version, Nielsen shares jumped 22% at the opening bell. The stock ended regular trading up 20.3% at $26.72 per share.
Nielsen has been criticized for not creating new methods to capture the time people spend watching streaming services, such as Netflix or Hulu. It has become a much more complex task as people now upload content to phones, tablets and other smart devices.
Nielsen is trying to address these complaints and is expected to launch a new cross-media measurement tool by the end of the year. Nielsen One, the company says, can provide more comparable and comprehensive measurements across platforms ranging from traditional TVs to a host of other digital and streaming services.
Nielsen’s board of directors voted unanimously in favor of the revised offer, and the company will go private if the transaction closes.
However, there is a 45-day shopping period during which Nielsen can consider and accept other offers, but breaking the deal with the private equity group incurs a termination fee of $102 million.
The deal is expected to close in the second half of this year. It still needs to be approved by Nielsen shareholders and regulators.