Following Publicis’ acquisition of Epsilon and WPP’s sale of a majority stake of Kantar, Nielsen is the last major industry data business under strategic review, and at least one Wall Street firm expects that to resolve soon, albeit outcome unknown.
“We expect [Nielsen] management to offer a bit more than a simple no comment,” BMO Capital Markets equities researcher Daniel Salmon writes in an update sent to investors this morning. Salmon was referring to the publicly traded research firm’s second-quarter earnings call, which the company has yet to schedule.
Nielsen has been conducting a “strategic review” for nearly a year, and in November 2018 hired Madison Avenue and media industry veteran David Kenny to serve as CEO while it mulls it.
Nielsen has offered scant comment on the direction, but given the M&A activity -- and Nielsen’s history of selling itself back and forth to private equity firms -- it’s possible it will once again be taken private, or possibly split up and be sold piecemeal.
However that resolves, the vast majority of Nielsen’s value is in its media business, not its marketing research assets. According to BMO’s “sum of the parts” analysis of Nielsen’s current balance sheet, about 83% of the company’s enterprise value comes from its media research division.
While BMO’s Salmon did not speculate on a suitor for Nielsen’s media business, he noted that the most likely candidate to acquire Nielsen’s consumer marketing research division is rival IRI (Information Resources Inc.), which currently is privately held.