Print | Share | Reprint

Nielsen backers boost size of secondary share sale

by David Holley | Published March 21, 2012 at 2:00 PM

The majority shareholders of Netherlands-based Nielsen Holdings NV are collecting $907.5 million from their first secondary offering since the television ratings company went public in 2011.

The offering, which priced late Tuesday, March 20, at $30.25 apiece, was upsized by 5 million shares to 30 million.

At $30.25 per share, six selling shareholder groups -- Thomas H. Lee Partners LP, Kohlberg Kravis Roberts & Co. LP, Blackstone Group LP, Carlyle Group, Hellman & Friedman LLC and AlpInvest Partners NV of the Netherlands -- should gain more than $900 million in cash, equivalent to about 20% of the $4.4 billion in equity they used to leverage the buyout of Nielsen in 2006.

A group of underwriters, led by J.P. Morgan Chase & Co. and Morgan Stanley, have the option to purchase an additional 4.5 million shares, up from the 3.7 million previously disclosed.

The offering is the first realization by the sponsors since taking Nielsen public in January 2011. The consumer data and analytics agency raised $1.6 billion in the initial public offering in one of the largest IPOs of a private equity-held business since 2006. But unlike other investments of that vintage that have generated multiple dividends, particularly during the credit boom, Nielsen's backers received only a $7 million dividend paid out to shareholders in 2010 and did not sell shares in the IPO.

The secondary sale comes as Nielsen has enjoyed growth, with revenue rising from $4.8 billion in 2008 to $5.5 billion in 2011. Ebitda was $1.23 billion for 2011 and has remained flat since 2010, when it crossed the $1 billion mark at $1.29 billion.

"We were all expecting this," said Laura Martin, an analyst at Needham & Co. LLC, adding that the sale indicates a readiness on the sponsors' part to exit the company.

The group of six investors paid $10.3 billion for Nielsen in the 2006 leveraged buyout, injecting $4.4 billion of combined equity. Centerview Partners LLC joined the group in November 2006, paying $50 million to the firms for a small stake.

The proceeds from the secondary sale and the remaining 240 million shares the sponsors own, valued at about $7.3 billion, equate to roughly 186% in realized and unrealized gains on their investment.

Nielsen's amended S-1 filings previously indicated that the private equity firms planned to sell 25 million shares. The company has not disclosed how the additional 5 million shares were divided among the sponsors.

A Nielsen representative declined to comment on the additional 5 million shares, deferring to a final prospectus.

THL and KKR, two of the largest shareholders, are selling the largest portion of the first 25 million shares. If underwriters exercise their greenshoe option fully, THL and KKR would bring home $202.7 million, according to regulatory filings. Carlyle, which owns slightly fewer shares than the other two firms, hopes to raise about $199.6 million. Blackstone, which wants to sell enough shares to earn $99.8 million, would be the largest shareholder of the private equity consortium after the offering, owning 14.4% of Nielsen shares.

Hellman & Friedman expects to raise $94.9 million, while AlpInvest is expecting $68 million. Centerview, which owns only 1.2% of Nielsen, plans to sell just a few hundred thousand shares to earn $12.2 million.

THL declined to comment. Others did not return requests.

Nielsen, which changed its name from VNU Group BV in 2007, does business in more than 100 countries. It is the leading source of audience measurement and provides brand and market research services to a range of customers.

Simpson Thacher & Bartlett LLP in New York and Clifford Chance LLP in Amsterdam represented Nielsen. Cahill Gordon & Reindel LLP in New York and Loyens & Loeff NV in Amsterdam are advising the underwriters.

J.P. Morgan and Morgan Stanley are the lead underwriters, along with Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, Goldman, Sachs & Co., Wells Fargo Securities LLC, HSBC Holdings plc, Guggenheim Securities LLC, RBC Capital Markets, William Blair & Co. LLC, Loop Capital Markets, Mizuho Securities Co. Ltd., Ramirez & Co. and Williams Capital Group LP.

Share:

Telecom, Media & Technology

Nielsen backers boost size of secondary share sale

Free preview

Meet the journalists

David Holley

Reporter, private equity

Movers & Shakers

Video

Coming back for more

Sectors