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Tuesday, December 18, 2012

Stunner! Nielsen Acquires Arbitron For $1.26B

Nielsen Holdings N.V. announced that it has signed a definitive agreement to acquire Arbitron Inc., an international media and marketing research firm.

Nielsen has agreed to acquire all of the outstanding common stock of Arbitron for $48 per share in cash, representing a premium of approximately 26 percent to Arbitron’s closing price on December 17, 2012. Nielsen has a financing commitment for the total transaction amount. The transaction has been approved by the boards of both companies and is subject to customary closing conditions, including regulatory review.

U.S. consumers spend almost 2 hours a day with radio. It is and will continue to be a vibrant and important advertising medium,” Nielsen’s chief executive, David Calhoun, said in a statement. “Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen`s priorities.”

Together, Nielsen and Arbitron generated total revenues of $6.0 billion and combined pro forma adjusted EBITDA of $1.7 billion based on the 12 months ended September 30, 2012. The combined assets will support Nielsen's strong cash flow characteristics and will enable continued investment in growth initiatives. Excluding estimated transaction costs and purchase accounting adjustments, the acquisition is expected to be approximately $0.13 accretive to adjusted EPS 12 months after the close and approximately $0.19 accretive to adjusted EPS 24 months after the close. Cost synergies associated with the acquisition are expected to be at least $20 million and will be largely driven by the integration of technology platforms and data acquisition efforts.


Nielsen Media Research was founded by Arthur Nielsen, who was a market analyst whose career had begun in the 1920s with brand advertising analysis and expanded into radio market analysis during the 1930s, culminating in Nielsen ratings of radio programming, which was meant to provide statistics as to the markets of radio shows. 

In 1950, Nielsen moved to television, developing a ratings system using the methods he and his company had developed for radio. That method has since become the primary source of audience measurement information in the television industry around the world.

Tom's Take:  Consolidation (survival) continues and with it comes lay-offs.

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