VNU and IMS Health in $7bn merger deal
The MR industry was rocked early this morning as consumer and media information giant VNU announced plans to merge with IMS Health, the world's largest healthcare research company, in a deal valued at $7bn.
The merger, which is expected to close in the first quarter of 2006 and is subject to shareholder and regulatory approvals, reunites the former Dun & Bradstreet companies IMS, ACNielsen and Nielsen Media Research – now owned by VNU.
It brings to an end months of speculation centred on how VNU would spend the EUR 1bn it raised with the sale of its World Directories business in November last year.
GfK was tipped as a potential takeover target before it bought NOP, while many commentators believed that the VNU executive had its eye on boosting the company's media research assets, possibly with an acquisition of US radio ratings supplier Arbitron.
A senior media research industry source told Research: “Everybody thought [VNU] would spend the money on another media company [but] I think VNU is interested in any company that turns over about 20% on revenue.”
As a combined entity, VNU and IMS expect pro forma annual EBITDA (earnings before interest, taxation, depreciation and amoratisation) of about $1.3bn and an EBITDA margin of around 23%.
The merger is expected to generate annualised EBITDA synergies of $130m by 2008, however VNU expects to spend around $180m in pursuit of these savings. This morning its shares were trading down 93 cents or 3.98% on Friday's closing price.
VNU chief executive Rob van den Bergh is to become CEO of the combined company, while IMS president David Carlucci will become deputy CEO and chief operating officer. VNU shareholders will have a majority stake of 65% following the merger, with IMS investors holding 35%.