In a move that is likely to face regulatory review, Nielsen this morning announced an agreement to acquire media and marketing research rival Arbitron in a cash and stock deal valued at $48 per Arbitron share.
Nielsen said the offer represents a 26% premium over Arbitron's Dec. 17th closing price.
Nielsen said it has a financing commitment for the total transaction amount. The transaction has been approved by the boards of both companies and is subject to customary closing conditions, including regulatory review.
“U.S. consumers spend almost two hours a day with radio. It is and will continue to be a vibrant and important advertising medium," stated Nielsen Chief Executive Officer David Calhoun. "Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”
Nielsen said it intends to further expand its “Watch” segment’s audience measurement across screens and forms of listening.
Together, Nielsen and Arbitron generated total revenues of $6.0 billion and combined pro forma adjusted EBITDA of $1.7 billion based on the 12 months ended September 30, 2012. The combined assets will support Nielsen's strong cash flow characteristics and will enable continued investment in growth initiatives. Excluding estimated transaction costs and purchase accounting adjustments, the acquisition is expected to be approximately $0.13 accretive to adjusted EPS 12 months after the close and approximately $0.19 accretive to adjusted EPS 24 months after the close. Cost synergies associated with the acquisition are expected to be at least $20 million, and will be largely driven by the integration of technology platforms and data acquisition efforts.