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NEWS12 July 2019

WPP to sell 60% of Kantar to Bain

M&A Media News UK

UK – US private equity firm Bain Capital is to acquire a 60% stake in Kantar, WPP has confirmed.

The investment values Kantar at around $4bn and is expected to result in proceeds of around $3.1bn (£2.5bn) for WPP after tax and transaction costs, helping to fund the company’s turnaround plans.

WPP confirmed it was reviewing Kantar’s ownership in October 2018, following months of speculation after the departure of former chief executive Martin Sorrell. The sale, which attracted interest from a number of bidders, will strengthen Kantar and lead to ‘significant value’ for shareholders, the group said in a statement.

Eric Salama (pictured) remains chief executive of Kantar, while Robert Bowtell stays as chief financial officer.

Mark Read, chief executive officer, WPP, said: "Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities."

WPP plans to retain around 60% of the net proceeds from the sale to strengthen its balance sheet, with the remainder (around $1.2bn) going to shareholders, the company said.

Read added: "This transaction creates value for WPP shareholders and further simplifies our company. 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."

WPP said Kantar will be removed from the wider group through a reorganisation and placed within a holding structure ahead of the deal’s completion. WPP expects the sale to be concluded in a number of stages, with a completion of the majority of Kantar’s operations expected in early 2020.

Luca Bassi, a managing director at Bain Capital Private Equity, said: "Kantar is a market leader in many areas and we are excited to be partnering with its management team and WPP to build on this remarkable platform for growth. We see many opportunities for expansion and will invest in technology to expand the company’s capabilities and reinforce its global leading position."

The new ownership structure will allow Kantar to invest more in people and technology, according to Salama. He said: "In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can 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."

The deal is subject to the approval of WPP shareholders and regulatory and legal approvals.

Lorna Tilbian, chairman of Dowgate Capital, told Research Live: "This sale is a win-win situation. It reduces WPP’s high debt and helps simplify its business while it gives Kantar a new focused owner with the ability to invest in it."

@RESEARCH LIVE

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