Bain Capital completes purchase 60% of WPP’s Kantar

Deal, which values the business at $4bn, part of push to cut debt and simplify the network

Mark Read, CEO of advertising agency WPP, leaves the company AGM in London last year.

Mark Read, CEO of advertising agency WPP, leaves the company AGM in London last year.

 

Bain Capital agreed to buy 60 per cent of WPP’s market research unit Kantar in a deal that values the business at $4 billion.

The private equity firm entered into exclusive talks with ad group WPP last week after beating out rival buyout companies.

WPP will retain around 60 per cent of the proceeds of around $3.1 billion from the sale to cut debt to the low end of a target range, and return around $1.2 billion to shareholders, it said in a statement.

The price is in line with the valuation reported last week by Bloomberg when the exclusive talks began.

Bain was competing against Apollo Global Management, Platinum Equity and Vista Equity Partners in the final round of bidding, people familiar with the auction said previously.

The sale is part of WPP chief executive officer Mark Read’s push to cut debt and simplify the global ad agency network after ditching his predecessor Martin Sorrell’s acquisition-fuelled growth strategy.

Sorrell had strongly advocated keeping Kantar, which analysts say has underperformed the rest of WPP in recent years.

Kantar’s chief executive Eric Salama said last month that a new majority owner could look for ways to speed up its time to market for data and services, drive growth with existing clients and move its business more into digital activities.

“With a much stronger balance sheet and a return of approximately 8 per cent of our current market value to shareholders planned, we are making good progress with our transformation,” Mr Read said in the statement.

WPP has been struggling to adapt its sprawling global network of more than 100 agencies as clients shift more marketing online, opting against TV and billboard ads where WPP is traditionally strong.

Web giants such as Facebook and Amazon.com are cutting out agencies and working directly with brands. – Bloomberg