Nielsen Co., whose television- audience ratings help set advertising prices, plans to return as a public company four years after being taken private for $10.2 billion by investors including Blackstone Group LP and Carlyle Group, said a person with knowledge of the plans.
The owners of New York-based Nielsen are lining up bankers to manage the share sale, said the person, who asked not to be identified because the plans haven’t been disclosed.
Buyout firms are using an improving market for initial public offerings to sell companies and return cash to investors. Eight private-equity-backed companies have raised $1.5 billion this year, according to Pitchbook Data Inc., a Seattle-based research firm. Twenty-five such IPOs raised $7 billion in 2009.
“Private-equity firms are trying to take advantage of the robust markets to return money to their investors, as well as to help their companies pay down debt,” Adley Bowden, managing editor of Pitchbook Data, said in an interview.
There are more than 50 private-equity-backed IPOs in the pipeline, estimates Scott Gehsmann, a capital-markets partner with PricewaterhouseCoopers’ transaction-services group in New York, which advises buyout firms on IPOs.
“Many would argue that private-equity firms are now driving IPO activity,” Gehsmann said in an interview.
Nielsen’s owners also include New York-based KKR & Co., Thomas H. Lee Partners LP in Boston, AlpInvest Partners NV of Amsterdam and San Francisco-based Hellman & Friedman LLC. The company changed its name from VNU Group BV in 2007.
TV, Radio, Online
Ed Dandridge, a spokesman for Nielsen, declined to comment on the IPO plans, which were reported yesterday by the Financial Times. The company’s owners expect a sale to value Nielsen at $17 billion to $21 billion including debt, the newspaper said.
Nielsen, with operations in more than 100 countries, measures audiences across TV, radio, online and mobile phones and provides brand and market-research services. It has lost money each year since the 2006 buyout, according to data compiled by Bloomberg. The company had $8.66 billion of debt as of Dec. 31.
“They dominate the business,” Ed Atorino, a New York-based equity analyst with Benchmark Co., said in an interview. “They’re probably more essential than ever with all this explosion in media.”
One Nielsen competitor is publicly traded Arbitron Inc., based in Columbia, Maryland, which provides audience measurements for radio stations and research on consumers.
Arbitron trades at more than 10 times its enterprise value to earnings before interest, taxes, depreciation and amortization. Nielsen’s private-equity owners hope an IPO would value the company at 11 times to 13 times Ebitda, the Financial Times reported, citing people familiar with the plans.
Arbitron has an enterprise value of about $900 million, according to Bloomberg data.
Arbitron rose 17 cents to $31.91 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 36 percent this year, compared with the 16 percent increase by the Standard & Poor’s Supercomposite Media Index.
Private-equity firms are taking advantage of a rebound in equity markets from their February lows to sell assets after returning less money to clients in 2009 than any year on record. Amadeus IT Holding SA, the flight-reservations provider controlled by BC Partners Ltd. and Cinven Ltd., announced an IPO of as much as $1.9 billion two weeks ago.
Brenntag AG, the German chemicals distributor owned by BC Partners, and Providence Equity Partners-controlled Kabel Deutschland Holding AG both raised more than $1 billion in IPOs last month.
Every private-equity-backed company “that comes public is under intense scrutiny,” said David Menlow, president of Millburn, New Jersey-based IPOfinancial.com.
Some private-equity-backed companies have not paid off for new shareholders. Metals distributor Metals USA Holding Corp., based in Fort Lauderdale, Florida, has fallen 7.9 percent since the company was taken public on April 8. New York-based Apollo Management LLC bought Metals USA in 2005.
U.S. IPOs stumbled at the start of 2010 as the first 14 deals were cut by 22 percent on average, Bloomberg data show.
New York-based Blackstone, the world’s largest buyout firm, raised less than half of what it sought for Graham Packaging Co. of York, Pennsylvania, in February.
The market for U.S. IPOs recovered in the last six weeks as the Standard & Poor’s 500 Index reached its highest level since September 2008, when Lehman Brothers Holdings Inc. of New York collapsed in the biggest bankruptcy in history. Last week, companies trying to raise money through initial sales suffered setbacks as six deals raised 20 percent less than the maximum sought on average, data compiled by Bloomberg showed.
The Bloomberg U.S. IPO Index has gained 9 percent this year.