Nielsen Holdings Files to Raise $1.75 Billion in IPO

Nielsen Holdings BV, the television- audience rating company owned by KKR & Co., Thomas H. Lee Partners LP, Blackstone Group LP and Carlyle Group, filed to raise as much as $1.75 billion in an initial public offering.

Nielsen will use the proceeds to help pay down its $8.6 billion in debt, according to a filing with the Securities and Exchange Commission. The New York-based company didn’t disclose how many shares it would offer or at what price it would sell the stock. JPMorgan Chase & Co. and Morgan Stanley, along with Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc. and Citigroup Inc. will manage the IPO, the filing showed.

The market-research company is pressing ahead with the IPO even after the European debt crisis triggered a 9.9 percent slump in the MSCI World Index of developed-nation stocks in May and at least 20 companies worldwide postponed or shelved IPOs. Initial offerings from U.S. companies backed by buyout firms are also losing money for IPO investors for the first time in at least a decade, data compiled by Bloomberg show.

“The market is volatile, but this is a solid brand,” said Paul Schaye, managing partner of New York-based Chestnut Hill Partners, which helps private-equity firms identify investments. “Private-equity funds are of certain vintages, just like wine. At some point, you have to pop the cork and drink it.”

Leveraged Buyout

Nielsen is going public four years after it was acquired by a group of six leveraged buyout firms for $10.2 billion. Private-equity funds, which spent a record $1.6 trillion on deals from 2005 to 2007, are selling assets in initial public offerings after returning less money to clients last year than any time since at least 2000.

Ed Dandridge, a spokesman for Nielsen, declined to comment beyond the filing and said Nielsen executives were not available. David Calhoun, previously vice chairman of Fairfield, Connecticut-based General Electric Co., has been chief executive officer and executive director of Nielsen since the 2006 LBO.

AlpInvest Partners NV of Amsterdam and San Francisco-based Hellman & Friedman LLC also own stakes in Nielsen. The company, which changed its name from VNU Group BV in 2007, has operations in more than 100 countries and measures audiences across TV, radio, websites and mobile phones and provides brand and market- research services. It had $8.6 billion of debt as of March 31.

‘Meaningfully Improved’

Revenue rose 9 percent to $1.2 billion in the first quarter from $1.1 billion a year earlier, according to the filing. Net income increased to $42 million in the period from $2 million. Nielsen doesn’t plan to pay dividends on its common stock for the “foreseeable future” and will retain earnings to repay debt and fund expansion.

“Companies with significant debt loads only have so many options for refinancing or repaying that debt, and tapping the equity markets is one,” Mike Simonton, a Chicago-based credit analyst with Fitch Ratings, said in an e-mail. “Nielsen was taken out earlier in the buyout boom. The sponsors have had several years for their strategies to take hold and there’s evidence that their efforts have meaningfully improved the enterprise.”

Nielsen’s 150 million euros ($183 million) of 9 percent notes due in 2014 were quoted at 103 cents on the euro, while the $500 million of 11.125 percent notes due in 2016 are valued at about 97 cents, according to Evolution Securities Ltd. Both securities have risen about 3 points since the announcement.

Nestle, P&G

The company’s TV ratings are an industry standard that help set advertising prices in the U.S. Nielsen also measures retail transactions and consumer behavior for the packaged-goods industry, showing how well products sell and are marketed.

Coca-Cola Co. of Atlanta, NBC Universal, Vevey, Switzerland-based Nestle SA, News Corp. in New York and Cincinnati-based Procter & Gamble Co. are among Nielsen’s top 10 clients, according to the filing.

Buyout funds are turning to IPOs after money raised by LBO firms fell 78 percent to $35 billion in the fourth quarter of 2009, according to Preqin Ltd. of London. The collapse of New York-based Lehman Brothers Holdings Inc. a year earlier had stymied deals and frozen credit markets.

LBO firms are pushing ahead with some of the biggest initial U.S. offerings of 2010 even after private equity-backed IPOs from Fort Lauderdale, Florida-based Metals USA Holdings Corp. and Niska Gas Storage Partners LLC of Houston declined.

HCA, NXP

The 14 initial sales by private-equity funds so far this year have fallen 2.3 percent in the first month of trading after averaging gains every year since at least 2001, data compiled by Bloomberg and Greenwich, Connecticut-based Renaissance Capital LLC show.

HCA Inc., the hospital chain bought four years ago in a $33 billion LBO led by New York-based KKR and Bain Capital LLC of Boston, filed last month to sell as much as $4.6 billion in shares. The Nashville, Tennessee-based company’s U.S. IPO would be the largest since Visa Inc. of San Francisco raised $19.7 billion in March 2008.

NXP Semiconductors NV, the Dutch chipmaker owned by KKR and Bain, said in April it will seek to sell $1.15 billion of shares. Apax Partners LLP in London was also among the private- equity funds that acquired Eindhoven, Netherlands-based NXP from Royal Philips Electronics NV of Amsterdam in 2006.

Toys “R” Us Inc., the Wayne, New Jersey-based retailer acquired by KKR, Bain and Vornado Realty Trust in 2005, said last week it plans to raise as much as $800 million in an IPO.

To contact the reporters on this story: Zijing Wu in London at zwu17@bloomberg.net; Sarah Rabil in New York at srabil@bloomberg.net.

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; Daniel Hauck at dhauck1@bloomberg.net.

File photo of a Nielsen Co. facility near Tampa Bay, Florida, where the company produces its television ratings data. Source: Nielsen via Bloomberg