Out of New York comes word today that Nielsen Holdings N.V. [1], global provider of information and insights into what consumers watch and buy, has signed a definitive agreement to acquire Arbitron Inc. [2], international media and marketing research firm.
[3]And while the two companies are involved measuring other media, radio seems to be top of mind in the acquisition according to the companies’ press statements.
Nielsen has agreed to acquire all of the outstanding common stock of Arbitron for $48 per share in cash, representing a premium of approximately 26% to Arbitron’s closing price on December 17, 2012. Nielsen has a financing commitment for the total transaction amount. The transaction has been approved by the boards of both companies and is subject to customary closing conditions, including regulatory review.
“U.S. consumers spend almost two hours a day with radio,” says David Calhoun, Nielsen CEO. “It is and will continue to be a vibrant and important advertising medium. Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”
With Arbitron assets, Nielsen intends to further expand its ‘Watch’ segment’s audience measurement across screens and forms of listening.
“These integrated, innovative capabilities will enable broader measurement of consumer media behavior in more markets around the world,” says Steve Hasker, Nielsen president of global media products and advertiser solutions. “We will also bring local clients greater visibility to empower more precise advertising placement and campaign effectiveness.”
“Radio reaches more than 92% of all American teens and adults because they love to listen to music, talk, news and information while at home, at work and in their cars,” says William Kerr, president and CEO of Arbitron (who is stepping down Jan. 1 with his position to be taken by Sean Creamer. [4]) “By combining Nielsen’s global capabilities and scale with Arbitron’s unique radio measurement and listening information, advertisers and media clients will have better insights into consumer behavior and the return on marketing investments.”
Together, Nielsen and Arbitron generated total revenues of $6.0 billion and combined pro forma adjusted EBITDA of $1.7 billion based on the 12 months ended Sept. 30/12. The combined assets will support Nielsen’s strong cash flow characteristics and will enable continued investment in growth initiatives. Excluding estimated transaction costs and purchase accounting adjustments, the acquisition is expected to be approximately $0.13 accretive to adjusted EPS 12 months after the close and approximately $0.19 accretive to adjusted EPS 24 months after the close. Cost synergies associated with the acquisition are expected to be at least $20 million and will be largely driven by the integration of technology platforms and data acquisition efforts.
Nielsen is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.
Arbitron, Inc. is an international media and marketing research firm serving the media -radio, television, cable, and out-of-home – the mobile industry, as well as advertising agencies and advertisers around the world. Arbitron businesses include: measuring network and local market radio audiences across the United States; surveying the retail, media, and product patterns of U.S. consumers; providing mobile audience measurement and analytics in the United States, Europe, Asia, and Australia; and developing application software used for analyzing media audience and marketing information data. The Company has developed the Portable People Meter (PPM) and the PPM 360, new technologies for media and marketing research.