To streamline it is business, the world’s largest advertising group, WPP said it is selling its research unit, Kantar to Bain Capital.
The transaction which will handover Kantar to Bain for $4 billion is aimed to make ‘WPP leverage target to be met a year ahead of plan; c.£1.0bn shareholder return planned.
WPP said in a statement that it plans to retain ‘60% of net proceeds to reduce debt to the low end of the target leverage range of 1.5 – 1.75x average net debt/EBITDA for 2020’.
Mark Read, Chief Executive Officer, WPP, said:
“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities. I would like to thank Eric Salama, his team and everyone at Kantar for their tremendous contribution to WPP – a contribution that will continue as we develop the business together.
“This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”
Luca Bassi, a Managing Director at Bain Capital Private Equity, said:
“Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position.”
Christophe Jacobs van Merlen, a Managing Director at Bain Capital Private Equity, said:
“We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition.”
Eric Salama, CEO, Kantar, said:
“Our new ownership structure presents a great opportunity for Kantar, our employees and our clients. In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider.”