Nielsen New 375

A pack of buyout firms is reportedly exploring a bid to buy Nielsen as the measurement giant continues a strategic review of its options, which could involve a sale of all or parts of the company. Among the interested suitors is Chicago-based private equity group Madison Dearborn, which last year hired former Nielsen global president John Lewis as an executive partner “to secure compelling investment opportunities” in the information services landscape.

Lewis is said to be playing a pivotal role in structuring a possible bid for Nielsen.

Nielsen has been under activist shareholder pressure to sell. In August, Hedge fund Elliott Management said it bought stocks and options totaling 8.4% of the measurement provider. Run by billionaire Paul Singer, the activist investor said in a regulatory filing it will “encourage the issuer to undertake a full strategic review of, and initiate a process to explore the sale.”

In September, Nielsen said it was expanding a strategic review of the company to include a possible outright sale of the entire operation or a spin-off of parts of its business. Other options being considered include continuing to operate as a public company or a spin of either its Buy or Watch segments. Nielsen has hired J.P. Morgan Securities and Guggenheim Securities as financial advisors, and Wachtell, Lipton, Rosen & Katz as legal counsel to assist in the review.

Madison Dearborn isn’t the only private equity group kicking the tires at Nielsen. At least half a dozen buyout firms have hired advisers for potential bids, according to the Financial Times. Among those reportedly studying a possible offer are a group led by Blackstone and Hellman & Friedman, along with Washington-based Carlyle and Singapore’s GIC and Canada’s CPPIB.

Unclear at this point is whether Madison Dearborn is interested in buying all or parts of Nielsen and if it would make an offer alone or as part of a consortium. Since its foundation 30 years ago, Madison Dearborn has raised seven funds with aggregate capital of roughly $23 billion and has completed investments in more than 140 companies.

A sale of the company could bring a big payday for David Kenny, the senior VP from IBM who will replace 22-year Nielsen vet Mitch Barns as CEO on Monday (Dec. 3). Should Nielsen be taken over for a price equal to $35 a share, Kenny could pocket $15.4 million in stock options and restricted stock units, based on estimates by AllianceBernstein analysts quoted in the Financial Times. A $35 a share offer would mark a 31% premium over Nielsen’s closing price on Sept. 12, when it announced it was expanding the strategic review to include a potential sale of the company. Factoring in its $8 billion in debt, the Financial Times pegs Nielsen’s current enterprise value at $18 billion.

“The CEO’s compensation package includes plenty of financial motivation for him to be supportive of the sale of the company,” AllianceBernstein analyst Todd Juenger told the Financial Times. With a background in data, advertising, media, digital and management, Kenny checks a lot of boxes for Nielsen at a precarious juncture. Juenger called Kenny a “true triple threat, an executive who has been successful running public companies, private companies and selling companies”.

In a second consecutive down quarter, Nielsen’s total revenues were $1.6 billion in third quarter, a decrease of 2.5% or 0.6% on a constant currency basis, compared to the third quarter of 2017. Some of Nielsen’s biggest Q3 losses occurred in its Buy segment, which tracks consumer purchases, where billings fell 6.0% to $755 million.