Nielsen Holdings has completed an anticipated deal to spin off its Nielsen Global Connect unit for $2.7 billion to Advent International, a private equity company, in partnership with former chief executive officer of TransUnion James Peck.
Advent International made investments in data and information services companies for nearly 30 years.
Peck was formerly CEO of TransUnion, the U.S. consumer credit reporting agency.
Nielsen says the deal is subject to “working capital, cash, debt-like items and other customary adjustments.”
In return, Nielsen will get warrants in the new private company, Nielsen Global Connect.
In early 2021, the Global Connect business will be renamed NielsenIQ.
The proceeds from the sale will allow Nielsen to significantly reduce debt.
In 2019, Nielsen's gross debt was $8.3 billion. The company has been under pressure from the hedge fund Elliott Management, which bought a stake in 2018, for Nielsen to sell or spin off businesses.
David Rawlinson will remain chief executive officer of Nielsen Global Connect.
Nielsen Global Connect provides retail measurement and insights to consumer packaged goods manufacturers and retailers.
As part of the deal, Nielsen will give Nielsen Global Connect a license to brand its products and services with the Nielsen name and other Nielsen trademarks for 20 years following closing. In addition, Nielsen and Advent will provide certain transitional services to each other for periods of up to two years following closing.
In the second quarter of this year, revenues for Nielsen Global Connect sank 10.2% to $685 million, with the unit witnessing a decline of 7.2% in developed markets and a 15.5% drop in emerging markets. Developed markets are 60% of total Connect revenue.
For all of 2019, Nielsen Global Connect business revenues declined 2.6% to $3.14 billion.
In 2019, Nielsen separated the company into two segments: Nielsen Global Media and Nielsen Global Connect. The intent was to spin off or sell the entire Global Connect unit.
Earlier this year, at a Bernstein Research industry conference, CEO of Nielsen Holdings David Kenny said, with regard to the proposed spinoff or sale of Global Connect:
"It is worth it in terms of having two companies that can focus on their end markets actually [having] different cultures [and] different margin structures... I absolutely believe both companies will perform better independently."
He added: "We're getting some value on that already because we are largely operationally separate today. We made a lot of progress on that in the last several months."