The deal has Rentrak paying $98 million in Rentrak common stock, which equates to approximately 1.53 million shares, or 12.4% of Rentrak’s total shares outstanding. As part of the agreement, Kantar owner WPP will also purchase shares directly from the company for $56 million in cash, giving WPP a final stake of 16.7% of Rentrak’s stock.
Ratings service Rentrak has agreed to acquire the U.S. television measurement business of WPP’s Kantar business unit for $98 million in Rentrak common stock.
The transaction, when closed, will include Kantar Media’s customer contracts and customer relationships involved in U.S. television measurement, that the companies said will create “the benefits of clarity and simplicity for clients in the U.S. TV ratings marketplace with a single massive and passive TV measurement ratings service.”
The companies said this deal gives Rentrak and Kantar “better scale to rapidly innovate their products and services in the United States.” No Kantar Media TV measurement or global development capabilities outside of the United States are affected by this transaction.
Under the agreement, Rentrak will also integrate its national and local TV measurement with a number of Kantar’s U.S.-based services that focus on digital media, advertising expenditure and purchase data. The integration, Rentrak said, “will provide advertisers, agencies, TV networks, multichannel video program distributors (MVPDs) and television stations throughout the U.S. with even more powerful tools to understand consumers’ purchasing habits and the ability to link TV viewing habits with purchase and other behavior in the United States.”
“The combined expertise of Kantar and Rentrak will enable clients to better comprehend and leverage the relationship between United States TV viewing and brands,” said Kantar CEO Eric Salama. “We are excited about the future products that we can develop with Rentrak for the U.S. television industry. Clients will benefit from our focus on respondent-level media and purchase data.”
“This agreement is designed to help all of our U.S. agency and TV advertiser clients with new services in television measurement and consumer insights,” said Rentrak’s Vice Chairman-CEO Bill Livek. “We are thrilled to be working with WPP and look forward to partnering with Kantar to provide the marketplace with the best next generation of services.”
The stock purchase price equates to approximately 1.53 million Rentrak shares, or 12.4% of Rentrak’s total shares outstanding, and is valued at $98 million. As part of the agreement, WPP will also purchase shares directly from the company for $56 million in cash, giving WPP a final ownership stake of 16.7% of Rentrak’s stock. WPP may also purchase Rentrak shares on the open market so long as its total ownership of Rentrak stock does not exceed 20%.
Rentrak expects the agreement to produce multiple long-term revenue streams resulting directly from the acquisition of Kantar’s TV service, as well as from anticipated future joint marketing agreements with Kantar and the company’s expanded relationship with, and endorsement from, GroupM. Rentrak expects to add approximately $7 to $9 million in revenue in fiscal 2016 as a result of the transaction, which is expected to be slightly accretive in fiscal 2016.
The transaction, which is subject to customary regulatory approvals, is anticipated to be completed by the end of calendar 2014.
Goldman, Sachs & Co. served as financial adviser to Rentrak.