Nielsen is going private.
On Tuesday, the 99-year-old TV ratings giant announced an agreement to sell itself to a private equity consortium led by Brookfield Business Partners and Evergreen Coast Capital Corporation.
The PE consortium is buying a stake in Nielsen for 28, bringing the total value of the deal to 16 billion.
But the dance to get Nielsen out of the public market was already underway.
Nielsen and the consortium began their deal-or-no-deal negotiations earlier this month, after which Nielsen rejected the group’s $ 9 billion purchase offer. $ 16 billion bid bumping deal completed.
With the new owners, Nielsen’s future is no longer his own, and it is not yet clear what the consortium plans to do. In this case, however, there may be past propositions.
Elliott Investment Management, an active investor and affiliate of Evergreen Coast Capital Corporation, has already held a seat on Nielsen’s board for several years. Elliott pressured Nielsen in 2018 to sell its data analysis division NielsenIQ, splitting the two into separate companies.
Industry experts say history could repeat itself.
A private equity group is not rushing to save Nielsen with a bunch of capital as a “white knight,” Brian Hendrigan, CEO of cross-media DMP Advocado, told AdExchange.
Although Nielsen will have to invest in the innovation, it will have to make money behind the acquisition in order to return the stockholders at a premium of 60% of Nielsen’s share price before the talks are leaked. Not to mention the debt incurred.
The consortium could pull a page out of the PE playbook and move away from Nielsen’s core to create a “risky, Nielsen”, Hendrigan said, with the goal of creating a more streamlined entity, focusing on its existing specialties. Based TV ratings.
But that plan will require a lot of extra investment that may not be worth it in the end.
For example, new owners could invest in Nielsen One, Nielsen’s continuing to create cross-platform measurement solutions, or perhaps double to regain recognition from the Media Rating Council, says Bharad Ramesh, executive director of research and investment analysis at GroupM.
But the clock is ticking. Publishers are already “diversifying time and resources away from Nielsen,” Ramesh says. “Nilson One is great on paper – but it’s too late.”
For that reason, Nielsen’s re-emergence at this last stage is a dubious proposition, says John Hamilton, CEO of TVDataNow, a provider of CTV performance measurements.
Hamilton said a PE consortium “is unlikely to embrace the investment and sort of approach needed to develop a new currency in streaming.”
To make money on the deal, the new owners are likely to climb into Nielsen’s “Cash Cattle Business” (see panel rating) and “Sell Off”. [whatever] Technology they can, ”he said.
Not to mention that this year’s advances are just around the corner, and many big programmers, including NBCU, are already allowing marketers for the first time to deal with alternative measure providers. To stay competitive, Nielsen needs to have a “clear message” about the status and capabilities of its unified platform up front – and that may not happen in a few weeks, Hendrigan said.
Even if Nielsen is “sitting on a magic bean” with the answer to the cross-screen currency challenge, he added, it remains to be seen whether a spiffed-up Nielsen One will do the trick.
At the moment, when Nielsen claims that his cross-platform audience measurement capabilities are almost ready for prime time, it seems like “the boy that wolf cried.”
And when pushed, “quickly lost faith comes back very slowly,” he said. “I’m not sure it can be turned around with just one announcement.”
A “speed increase”
Nielsen’s future may be uncertain, but media experts agree that its acquisition is good news for the industry as it will create more competition.
Publishers and content providers are already signing agreements with alternative measurement providers to give marketers what they want, a faster, more transparent cross-platform currency.
Sean Cunningham, CEO of the Video Advertising Bureau and a longtime Nielsen critic, said Nielsen’s purchase was a “speed up” in that direction.
The deal makes it a “symbol of measurement and value placed on currency” among performance-oriented marketers, making it the “refuge of full-funnel metrics in front and center of TV advertising,” Cunningham told the AdExchange.