The future of marketing communications is data, WPP’s Sir Martin Sorrell tells us, and US investors seem to agree, forking out up to $1.9bn to buy the 20 per cent of US research giant Nielsen offered for sale in its initial IPO.
Nielsen also includes what’s left of the old B2B publishing company VNU.
If Wall Street agrees with this rating when the shares are listed later today (and it’s likely to barring disasters elsewhere as the shares were over-subscribed several times) then the whole company is likely to be valued at around $8bn, about half the total value of WPP including its agencies and other companies as well as research grouping Kantar.
Investors in Nielsen like the idea that it is going to use the proceeds of the IPO to pay down its $8bn debt (the consequence of its majority ownership by a gaggle of private equity companies) but, at some stage, the company led by former Carlyle executive David Calhoun is likely to expand and, as it already dominates research of the US media market, this is likely to be overseas.
Recently WPP has had things mostly its own way in the research market, trumping Germany company Gfk’s attempt to merge with TNS in 2008 by buying the biggest independent UK player for £1.1bn in a hotly-contested bid.
Now any other such properties (not that there are very many of them although new data companies are popping up in online all the time) will have two suitors from the research sector.
Nielsen’s status and worth is wholly dependent on the stranglehold it enjoys in big media contracts in the US and WPP will fancy it will be able to make a dent in this over time. But the view of the market seems to be that this hold is secure.
Elsewhere in the data sector my chum Stuart Smith reports that Omnicom’s $100m takeover of Diane Hessan’s social network data company Communispace is going through, despite radio silence on the affair since it leaked out before Christmas.
His report notes the tangled web of client relationships the deal will bring, some of Communispace’s clients are also Omnicom’s, other big ones not.
But it was ever thus.