WPP announced today a definitive agreement to sell 60% of its research unit to Bain Capital Private Equity in a deal that currently values the unit at $4 billion.
The agreement is subject to WPP shareholder approval and anti-trust approvals globally where Kantar operates. It is also subject to a reorganization of Kantar that will carve the division out of WPP and place it within its own holding structure.
The parties said they hope to complete the transaction in early 2020.
WPP will use some of the proceeds of the sale to reduce debt. An estimated $1.2 billion will be returned to shareholders.
“This transaction creates value for WPP shareholders and further simplifies our company,” stated WPP CEO Mark Read. "With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”
Earlier, the firm noted it was disposing of Kantar as part of a broader effort to streamline and reshape the holding company during a three-year transition process.
Christophe Jacobs van Merlen, a managing director at Bain Capital Private Equity, said: ”We believe that we are well-positioned to support Kantar, alongside WPP, in driving forward the business in a rapidly changing industry. Our deep sector knowledge, operational expertise and strong track record of partnering with management teams to accelerate growth gives us confidence that we can help Kantar grow both organically and by acquisition.”
Eric Salama, CEO Kantar, stated Bain would “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.”