London-headquartered Taylor Nelson Sofres has won the eagerly sought hand of US market-research company NFO WorldGroup, a unit of Interpublic Group.
The dowry is $425 million (€370.82m; £262.81m), $400m in ready cash, the remainder in TNS shares. The price raised analysts’ eyebrows, most of whom had predicted between $450m-$475m [wrong again, guys?]. The London market greeted the deal with enthusiasm (shares up 16% to £1.58), New York with indifference (+ 0.7% to $12).
Taylor Nelson finance director David Lowden said he expects the acquisition to boost earnings by over 10% in the second year after completion of the deal, due at the end of July. He would not predict its effect on current fiscal profits.
Most of NFO's business comes from the ad-hoc customized access-panel market, according to Lowden. This is cyclical and heavily exposed to the health of the advertising and public relations market, although there are “elements of the business that are continuous in nature.”
He observed, however, signs that the cycle’s nadir has been reached “in certain markets”, notably the USA, where NFO is the largest custom-tailored market research company.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff