Global market research firm, Taylor Nelson Sofres (TNS), has this morning confirmed that it plans to buy NFO Worldgroup for $425 million. The announcement comes after a preliminary statement from TNS last week, in which it confirmed that discussions with NFO’s owner, Interpublic Group, were underway.
Based on 2002 revenues, this deal will place Taylor Nelson Sofres as one of the top three global companies in the market research industry. NFO brings to TNS one of the leading US research panels and strengthens its internet data collection capabilities. It will also widen the group’s overall client base.
The directors of TNS expect the deal to be earnings enhancing in the current financial year, before exceptional costs. Annual synergies of around £3 million by the end of 2003 and over £10 million be 2004 are anticipated. One-off integration costs are set to be approximately £5-6 million this year.
The markets reacted very positively to the news, pushing TNS shares up by 16.5% to 158.5p by mid-morning today.
Current trading and outlook
Commenting on current trading at the group, chief executive Mark Kirkham says that the soft market conditions of H2 2002 continued into the first two months of 2003, although trading has improved steadily throughout March and April. Across the first four months of the year, TNS recording a positive underlying growth.
Given this trend, along with work already commissioned for the remainder of the year, Kirkham is comfortable with the outlook for the year as a whole.
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