WPP to sell 60% of Kantar to Bain Capital
Shareholders to get back $1.2bn as deal values market research firm at $4bn
WPP on Friday confirmed it planned to sell 60% of its Kantar market-research business to US private equity company Bain Capital, valuing it at $4bn (£3.19bn).
The advertising giant said it would retain around 60% of net proceeds, or $3.1bn, to cut debt to the low end of a target range, with the balance of $1.2bn returned to shareholders.
WPP is trying to transform itself after the sudden departure in April last year of chief executive Martin Sorrell over alleged misconduct, which he denied, and several profit warnings.
Chief executive Mark Read, who has been trying to turn the company around since Sorrell's departure, said WPP would continue to benefit from Kantar's future growth "while our clients continue to benefit from its services and capabilities".
"This transaction creates value for WPP shareholders and further simplifies our company. 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."
WPP said the impact of the deal and use of proceeds were forecast to be marginally dilutive to headline earnings per share in 2021, adding that it expected completion in early 2020, subject to approval by WPP shareholders and regulatory and legal approvals.