WPP sells 60% of Kantar to private equity firm Bain Capital

WPP has agreed to sell a majority stake of its market research company Kantar to private equity firm Bain Capital.

The agency holding group confirmed Friday (12 July) it has reached an agreement to sell 60% of the company to Bain, as part of chief executive Mark Read's strategy to reduce debt and simplify the structure of the group.

The investment values Kantar at US$4 billion. Proceeds to WPP on completion after tax and continuing investment in Kantar are expected to be circa US$3.1 billion, the group said.

WPP said it will use 60% of the net proceeds to reduce debt, and expects to return circa US$1.2 billion of the proceeds to shareholders.

According to reports, the private equity firm entered into exclusive talks for Kantar last week after beating out rival companies Apollo Global Management, Platinum Equity and Vista Equity Partners.

In a release announcing the deal, Read said the sale “creates value for WPP shareholders and further simplifies our company".

“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," he added.

Kantar's underlying sales fell 2% last year to £2.6 billion (US$3.26 billion) with operating profit down 14% to £301 million (US$377 million). The business generates about 15% of WPP's overall sales.

Luca Bassi, a managing director at Bain Capital Private Equity, said the firm sees "many opportunities for expansion" in Kantar.

"We will invest in technology to expand the company’s capabilities and reinforce its global leading position," he added.

Another Bain managing director, Christophe Jacobs van Merlen, said the firm has "confidence" it can grow Kantar "both organically and by acquisition".

Kantar chief executive Eric Salama said the new ownership structure "presents a great opportunity for Kantar, our employees and our clients".

Kantar CEO Eric Salama

"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. We are focused on delivering ‘human understanding at scale and speed’ and the ‘best of Kantar’ more consistently. We will do so by investing more in talent and by becoming a more technology-driven solutions provider," Salama said.

The sale is subject to approval by WPP shareholders and other customary regulatory and legal approvals.

Bain Capital was advised by Canson Capital Partners, Credit Suisse and Mediobanca.