WPP has today confirmed plans to sell a 60% stake in its data and insights consultancy, Kantar, to private equity firm Bain Capital.
The deal will see WPP retain a minority stake in the business.
Kantar has been valued at $4 billion in the proposed sale, with proceeds to WPP after tax and continuing investment in the business expected to be $3.1 billion.
WPP is to retain 60% of net proceeds to reduce debt, while the balance of proceeds – around $1.2 billion – is to be returned to shareholders.
The ad network first announced plans to sell Kantar in October last year, following a poor Q3 performance. According to WPP CEO Mark Read, the sale “further simplifies” the company and creates value for shareholders.
“Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities,” Read added.
“With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”
Eric Salama, CEO at Kantar, added that the new ownership structure presents a “great opportunity” for the consultancy and its clients.
“In Bain Capital we have a partner who shares our ambition, brings relevant expertise and – with WPP – can help us accelerate our growth and impact for clients.”
Meanwhile, commenting on the deal, Liberum analyst Ian Whittaker said that the deal – which has been conducted without any drama and in line with expectations “at pretty much all levels” – will not only be seen as a “relief”, but should also increase the market’s confidence in WPP’s ability to execute its strategy.
