Bain Capital to buy 60% of Kantar from WPP - ET BrandEquity

Cornelia Mascio
Luglio 14, 2019

FTSE 100 advertising firm WPP has revealed a plan to sell a stake in its data subsidiary Kantar to USA private equity firm Bain Capital.

Speaking about the deal in a statement, WPP said: "The board considered that the best way to unlock Kantar's potential and maximise shareholder value was with a strategic or financial partner".

WPP will retain about 60% of the net proceeds of the deal to reduce debt to the lower end of its targeted leverage.

Bain Capital Private Equity managing director Christophe Jacobs van Merlen added: "We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry". Sorrell had strongly advocated keeping Kantar, which analysts say has underperformed the rest of WPP in recent years.

Last week, Bain joined private equity major Carlyle to make a binding $3.4bn takeover offer for German lighting business Osram.

Liberum comments: 'The fact that this deal has been done without any drama and in line with expectations at pretty much all levels (price, return of proceeds, and in line with the stated timeframe) will not only be seen as a relief but should also increase the market's confidence in management's ability to execute its strategy'.

"This transaction creates value for WPP shareholders and further simplifies our company".

Bain Capital, an American private equity firm, will acquire a 60 per cent stake in Kantar under the proposed transaction terms, with proceeds for WPP expected to be £2.5bn.

It expects the proposed transaction and use of proceeds to be "marginally dilutive" to headline earnings per share in 2021.

Kantar CEO, Eric Salama said the new ownership structure presents a great opportunity for the company. It was envisaged that WPP would remain a share owner with strategic links to ensure that the benefits to clients were realised.

Luca Bassi, a London-based managing director at Bain, said there were opportunities to invest in Kantar's technology to expand its capabilities.

The deal, which is expected to close in early 2020, will result in a $3.2B after-tax gain for WPP.

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