By Clare Baldwin
NEW YORK, Jan 10 (Reuters) - Private equity-owned Nielsen Holdings set the terms on Monday for its $1.5 billion IPO and kicked off a roadshow that could set the tone for large buyout-backed IPOs in the United States in the new year.
Nielsen's IPO, which will account for about 20 percent of the company and give Nielsen a market value of around $7.3 billion, is the first of what is expected to be a rush of buyout-backed companies seeking money from the public markets.
Also on file in the United States are Toys R Us Inc , HCA and Kinder Morgan, which could look to Nielsen's performance as an indicator of whether to move forward.
On Monday, New York-based Nielsen said it plans to sell 71.4 million shares at $20 to $22 apiece, meaning it would raise $1.5 billion at the midpoint.
Last June, Nielsen filed to raise up to $1.75 billion in its IPO. It raised that amount to $2.01 billion in August.
But Nielsen, which is best known for its TV viewership ratings also tracks retail transactions and puts on trade shows and is difficult to value because it does not have any direct competitors, said Josef Schuster, founder of Chicago-based IPO research and investment firm IPOX Schuster LLC.
In preparation for its IPO, Nielsen is comparing itself to data companies Verisk Analytics Inc, IHS Inc and Experian Plc, a person familiar with the matter said.
Its IPO terms were set to give Nielsen a market value, including its debt, of around 9 to 9.5 times its earnings before interest, taxes, depreciation and amortization -- a valuation multiple known as 'EV to EBITDA,' the person said.
Private equity firms Carlyle Group, Blackstone Group LP, Kohlberg Kravis Roberts & Co, Thomas H. Lee Partners, AlpInvest Partners and Hellman & Friedman took Nielsen private in 2006 in a deal worth just over $10 billion.
The firms have taken $50 million in advisory fees since the acquisition and are expected to take an additional $103 million in fees along with the IPO, according to a regulatory filing.
None of the private equity firms are expected to sell shares in the IPO. They will retain a joint stake of nearly 80 percent in the company, post-IPO.
Proceeds from the IPO and a $250 million sale of bonds that eventually convert into shares, known as mandatory convertible subordinated bonds, will be used primarily to repay debt.
As of Sept. 30, Nielsen had total assets of $14.4 billion and total long-term debt and capital lease obligations of $8.6 billion.
Although its revenue has grown, Nielsen has posted net losses since its acquisition.
Still, in the nine months ended Sept. 30, Nielsen was on track to reverse its loss-making trend, posting net income of $128 million on revenue of $3.8 billion.
Schuster, who thinks the company will ultimately do well, cites Nielsen's customer base as a key reason he is planning to buy shares in the IPO.
'They have lots of long-term, existing relationships with blue-chip clients,' he said.
Nielsen's top clients include Coca Cola Co, NBC Universal and unit of General Electric Co, Nestle SA , News Corp, Procter & Gamble Co and Unilever NV.
JPMorgan and Morgan Stanley are leading the underwriters on the IPO. The company intends to list its common stock on the New York Stock Exchange under the symbol 'NLSN.'
For Breakingviews commentary, please see:
(Reporting by Sweta Singh in Bangalore, Alina Selyukh and Clare Baldwin in New York; editing by Maureen Bavdek and Andre Grenon) Keywords: NIELSEN/IPO Keywords: NIELSEN/IPO (sweta.singh@thomsonreuters.com ; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: sweta.singh.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Jan 10 (Reuters) - Private equity-owned Nielsen Holdings set the terms on Monday for its $1.5 billion IPO and kicked off a roadshow that could set the tone for large buyout-backed IPOs in the United States in the new year.
Nielsen's IPO, which will account for about 20 percent of the company and give Nielsen a market value of around $7.3 billion, is the first of what is expected to be a rush of buyout-backed companies seeking money from the public markets.
Also on file in the United States are Toys R Us Inc , HCA and Kinder Morgan, which could look to Nielsen's performance as an indicator of whether to move forward.
On Monday, New York-based Nielsen said it plans to sell 71.4 million shares at $20 to $22 apiece, meaning it would raise $1.5 billion at the midpoint.
Last June, Nielsen filed to raise up to $1.75 billion in its IPO. It raised that amount to $2.01 billion in August.
But Nielsen, which is best known for its TV viewership ratings also tracks retail transactions and puts on trade shows and is difficult to value because it does not have any direct competitors, said Josef Schuster, founder of Chicago-based IPO research and investment firm IPOX Schuster LLC.
In preparation for its IPO, Nielsen is comparing itself to data companies Verisk Analytics Inc, IHS Inc and Experian Plc, a person familiar with the matter said.
Its IPO terms were set to give Nielsen a market value, including its debt, of around 9 to 9.5 times its earnings before interest, taxes, depreciation and amortization -- a valuation multiple known as 'EV to EBITDA,' the person said.
Private equity firms Carlyle Group, Blackstone Group LP, Kohlberg Kravis Roberts & Co, Thomas H. Lee Partners, AlpInvest Partners and Hellman & Friedman took Nielsen private in 2006 in a deal worth just over $10 billion.
The firms have taken $50 million in advisory fees since the acquisition and are expected to take an additional $103 million in fees along with the IPO, according to a regulatory filing.
None of the private equity firms are expected to sell shares in the IPO. They will retain a joint stake of nearly 80 percent in the company, post-IPO.
Proceeds from the IPO and a $250 million sale of bonds that eventually convert into shares, known as mandatory convertible subordinated bonds, will be used primarily to repay debt.
As of Sept. 30, Nielsen had total assets of $14.4 billion and total long-term debt and capital lease obligations of $8.6 billion.
Although its revenue has grown, Nielsen has posted net losses since its acquisition.
Still, in the nine months ended Sept. 30, Nielsen was on track to reverse its loss-making trend, posting net income of $128 million on revenue of $3.8 billion.
Schuster, who thinks the company will ultimately do well, cites Nielsen's customer base as a key reason he is planning to buy shares in the IPO.
'They have lots of long-term, existing relationships with blue-chip clients,' he said.
Nielsen's top clients include Coca Cola Co, NBC Universal and unit of General Electric Co, Nestle SA , News Corp, Procter & Gamble Co and Unilever NV.
JPMorgan and Morgan Stanley are leading the underwriters on the IPO. The company intends to list its common stock on the New York Stock Exchange under the symbol 'NLSN.'
For Breakingviews commentary, please see:
(Reporting by Sweta Singh in Bangalore, Alina Selyukh and Clare Baldwin in New York; editing by Maureen Bavdek and Andre Grenon) Keywords: NIELSEN/IPO Keywords: NIELSEN/IPO (sweta.singh@thomsonreuters.com ; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: sweta.singh.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.