WPP has agreed to sell 60% of its data, research, consulting and analytics business Kantar to private equity firm Bain Capital, in a deal which values the whole of Kantar at around £3.2bn ($4.0bn).
WPP CEO Mark Read is currently driving a turnaround strategy and in March announced a formal process to sell Kantar - home to the agencies formerly known as TNS, Millward Brown and Lightspeed - with WPP retaining a stake in the business. Earlier this month, WPP confirmed that it was in exclusive talks with Bain Capital about the sale.
Proceeds to WPP from the deal (which is subject to the approval of WPP shareholders and regulatory and legal approvals) after tax and continuing investment in Kantar are expected to be c.£2.5bn (c.$3.1bn), and WPP will retain c.60% of net proceeds to reduce debt. The balance of c.£1.0bn (c.$1.2bn) will be returned to shareholders. Read says that with a much stronger balance sheet and a return of approximately 8% of current market value to shareholders planned, WPP is making good progress with its transformation.
As part of the deal, Kantar will be 'carved out' of the wider WPP group by way of a reorganisation, and placed into a holding structure ahead of completion. Eric Salama (pictured), who remains as Kantar CEO, comments: 'Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and - with WPP - can help us accelerate our growth and impact for clients. We are focused on delivering 'human understanding at scale and speed' and the 'best of Kantar' more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider'.
Web sites: www.wpp.com and www.kantar.com .
All articles 2006-19 written and edited by Mel Crowther and/or Nick Thomas.