GfK Wins Race for NOP

German-owned GfK has won the bidding for NOP World, acquiring it from United Business Media for £383 million (c.EUR 550m) in cash. The transaction remains subject to approval of the competition authorities in the United States and in Germany, but GfK says approval is expected at the end of May.

The acquisition, which will be financed by acquisition credit facilities of up to EUR 660 million, should lift GfK's sales above the EUR 1 billion mark - along with four other global market research companies.

In 2004, the expanded GfK Group including NOP World would have achieved sales of EUR 993 million and an EBIT of EUR 126 million. Approximately 25% of the combined sales would be attributable to North and South America, 24% to Germany, 15% to the UK and 32% to the rest of Europe.

NOP, which had grown to become the tenth largest MR group in the world, was established in 1957 and has been part of United Business Media since 1989. Its key markets are the United States, UK and Italy. With over 1,500 employees, the company achieved sales totalling £223 million (EUR 321m, $416m) and an operating profit of £20million (EUR 35m, $46m) in 2004. Subsidiaries in the US include Allison-Fisher International (automotive), MRI (print media), SMC and MMC (healthcare) and Roper (custom and syndicated research for consumer, financial and other markets). In the UK, NOP Research is one of the top 3 agencies, with a focus on Custom Research; and Eurisko is the No. 1 for custom research in Italy.

The acquisition enhances GfK's market position in three core areas, making it global No. 3 in Custom Research, No. 4 in Media and No. 2 in Healthcare. In geographical terms, GfK will become No. 6 in the US, and in the UK and Italy it will rank in the top 3.

Professor Dr. Klaus L. Wübbenhorst, CEO of GfK, stressed the wealth of NOP's research experience and expertise: 'Our employees and their knowledge and expertise are our most important asset. We look forward to welcoming the highly-qualified NOP World staff to the worldwide GfK network'.

GfK expects costs of approximately EUR 18 to 20 million in 2005 to cover 'synergy implementation'. In 2006 and beyond, GfK expects the transaction to result in substantial earnings accretion, and anticipates cost synergies of up to EUR 15 million per annum by 2007. The Group expects to continue its double-digit earnings growth in the next three years, and says it will be in a position to 'enhance its data collection and production systems and to improve its efficiency'.

UBM intends on completion of the sale to return £300 million of the proceeds of the disposal to UBM shareholders, representing c. 17% of UBM's current market value. CEO David Levin described himself as 'delighted with the achievement of this excellent result, both for UBM shareholders, enabling us to make a substantial capital return, and for NOP employees, who will have significant opportunities as part of a larger market research group. This transaction creates a more focused UBM which can continue to develop its global publishing interests'.

NOP is online at www.nopworld.com and GfK at www.gfk.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.