Bain Capital to acquire 60% stake in Kantar from WPP for $3.1 bn
WPP has proposed the sale of 60 per cent stake of its market research business Kantar to Bain Capital. Proceeds to WPP on completion after tax and continuing investment in Kantar expected to be $3.1 billion.
The acquisition is seen as creating a strong partnership with WPP to accelerate the development of Kantar. It further simplifies and repositions WPP for growth, whilst unlocking significant value for shareholders.
As per a release issued by WPP, Kantar is valued at $4.0 billion in the proposed transaction. WPP will retain 60 per cent 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. Balance of proceeds, that is, $1.2 billion, will be returned to shareholders.
Commenting on the development, 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.”
He further said, “This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8 per cent of our current market value to shareholders planned, we are making good progress with our transformation.”
Eric Salama, CEO, Kantar, added here, “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.”
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.”