WPP is selling a 60-per-cent share in its market-research company Kantar to Bain Capital Private Equity in a deal that values the company at $4bn (£3.2bn/ €3.55bn).
The advertising and public relations giant has set about streamlining its business and selling off non-core assets after Mark Read took over as chief executive from Sir Martin Sorrell last year.
Kantar conducts brand and marketing research for 92 of the world’s largest 100 advertisers. In sport, the company tracks and analyses fan behaviour, attitudes towards and experience of sporting events, sponsors and properties and measures TV and digital audiences for rights holders and brands.
A statement on the WPP company website said the sale “further simplifies and repositions WPP for growth, whilst unlocking significant value for shareholders”.
The sale is expected to generate $3.1bn after taxes with the holding company expected to use the proceeds to pay down debts and return $1.2bn to shareholders. WPP’s share price has lost a third of its value in the past two years.
In an internal memo, Read reassured staff that the sale would not limit its ability to deliver a full-service offering to clients: “We will remain a very significant shareholder and partner in Kantar, with strong links to the business. This means our clients will continue to benefit from Kantar’s services and we will continue to benefit from its growth.”
The Kantar sale comes as advertising companies grapple with whether to own their own data or work with third-party providers in the face of competition from companies like Facebook and Google. WPP is offloading its Kantar business as some of its competitors pivot towards the data space. Publicis Groupe paid $4.4bn for data and marketing services company Epsilon earlier this year.
Under Sorrell, WPP had ambitions to become a single, global sports marketing powerhouse but it has struggled to bring the different strands of its business together into a coherent offering. Last year, WPP subsidiary GroupM sold sponsorship consultancy IEG and the US operations of rights-holder-facing agency ESP Properties to Bruin Sports Capital’s Engine Shop agency. In early July, the company agreed to sell its minority shareholding in sports, entertainment and communications group Chime to majority shareholder, US private equity investment firm Providence Equity.