VNU Agrees To Public Offer From Private Equity Group
That Values Company at EUR 28.75 Per Common Share, or Approximately EUR 7.5 Billion in Cash
Offer represents a multiple of 13.4 times 2005 normalized EBITDA, an attractive valuation compared with
recent trading of peer company stocks as well as VNU's stock
Consortium intends to keep VNU substantially together as an integrated company pursuing existing long-term
strategy
Consortium members are affiliated funds of AlpInvest Partners,
The Blackstone Group, The Carlyle Group, Hellman & Friedman,
Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners
The Supervisory and Executive Boards unanimously support and unanimously recommend the Intended Offer
Haarlem, the Netherlands, March 8, 2006 - VNU N.V. (ASE: VNU), a leading global information
and media company, and Valcon Acquisition B.V. (the "Offeror"), a holding company newly incorporated in the
Netherlands, announced today that they have agreed to a public offer for VNU that values the company's equity
at EUR 7.5 billion, or EUR 28.75 per common share.
The expectation that VNU would reach an agreement on the intended public offer for all of the company's
issued common shares and 7% preferred shares was realized after a meeting of the company's Supervisory Board
in Haarlem yesterday evening. Following the meeting, VNU and the Offeror entered into a merger protocol for
the purchase of the company (the "Offer"). The Offeror is controlled by a private-equity group consisting
of affiliated funds of AlpInvest Partners N.V., The Blackstone Group L.P., The Carlyle Group, Hellman & Friedman
LLC, Kohlberg Kravis Roberts & Co. L.P. and Thomas H. Lee Partners, L.P.
The Supervisory and Executive Boards of VNU, after giving due consideration to the strategic, financial
and social aspects of the proposed transaction, unanimously support the Offer and conclude that it is in
the best interests of shareholders and all other stakeholders of VNU, and they unanimously recommend that
shareholders accept the Offer.
"Based on a long and careful analysis of various alternatives, including remaining a stand-alone company
and breaking up the company, we concluded that this transaction best serves the interests of VNU's shareholders,
clients and employees," said Aad Jacobs, chairman of VNU's Supervisory Board. "The all-cash offer provides
shareholders with an attractive price that fully reflects the independently assessed fair value of the company."
Offer Highlights
The Offer will be an all-cash offer for all of the issued and outstanding common shares and all of the issued
and outstanding 7% preferred shares of VNU N.V. Based on the Offer price of EUR 28.75 per common share,
the value of the offer for the common shares is approximately EUR 7.5 billion. Based on the Offer price
of EUR 13.00 per 7% preferred share, the value of the offer for the 7% preferred shares is approximately
EUR 2 million.
The Offer price of EUR 28.75 per common share represents:
- A multiple of 13.4 times 2005 normalized EBITDA (adjusted for IMS and IRI settlement costs and book gains),
an attractive valuation compared to the recent trading of peer company stocks, as well as to the recent
history of trading of VNU's stock; and
- A 23% premium over the closing price on July 8, 2005, the last trading day prior to VNU's announcement
of its planned merger with IMS Health.
The aggregate value of the transaction is approximately EUR 8.6 billion, or $10.3 billion, including net
indebtedness. VNU will not declare or pay any dividends on its common shares.
Launch of the Offer is subject to completion of preparations and customary conditions. The closing of the
transaction is conditioned upon 95% of VNU shareholders in each class, common and preferred, tendering their
shares, as well as regulatory approvals and other customary closing conditions. Following the closing, VNU
shares will no longer be listed on Eurolist by Euronext Amsterdam.
Rob van den Bergh, chief executive officer of VNU, said, "This transaction brings VNU new owners who support
our long-term strategy of growth through expanded market coverage; expansion into developing markets; technology
and service innovation; and development of integrated business solutions for our clients. It gives the company
the added operational flexibility of private ownership. VNU will continue to focus on improving efficiency
and integration across our businesses to ensure that we capture the substantial growth opportunities made
possible by our business model and strategy."
Previously, Van den Bergh had announced that he would step down as chief executive officer. This is now
anticipated to happen upon the closing of the transaction.
AlpInvest Partners N.V., The Blackstone Group L.P., The Carlyle Group L.P., Hellman & Friedman LLC, Kohlberg
Kravis Roberts & Co. L.P. and Thomas H. Lee Partners, L.P. said in a statement: "We are investing in the
future of a company with an unmatched portfolio of market-leading assets, a highly knowledgeable and dedicated
employee base and a sound strategy for the future. We intend to capitalize on these strengths by keeping
VNU substantially together as an integrated company and continue to pursue its long-term strategy of improving
operational efficiency and investing in product development and innovation. VNU's businesses bring together
a unique combination of market intelligence, analysis, advice and service. We are confident that the company
is well positioned to build further on these strengths."
Each of the six firms in the consortium has a strong track record of successful long-term investments in
a wide variety of companies and industries.
VNU has signed a Merger Protocol with the private-equity consortium. The company and the Offeror will make
all requisite filings with appropriate competition authorities and the Netherlands Authority for the Financial
Markets (AFM). VNU also will have all requisite consultations with, among others, the Works Council and trade
unions. VNU expects the public offer for its shares to commence in early to mid-April and to hold a shareholders
meeting to discuss the offer sometime in mid- to late April. This meeting is expected to coincide with VNU´s
annual shareholders meeting, currently scheduled for April 18, 2006. The company would expect the tender
period to be completed in early to mid-May, with acceptance and settlement of all tenders by the end of May.
Among other things, the Offeror has given the company certain undertakings relating to the continuation
of employee benefit programs for 12 months following completion of the tender.
Background of the Offer
On December 14, 2005, the company disclosed that it had received expressions of interest from various parties
regarding a possible acquisition of the company. The company's Supervisory Board and Executive Board began
to evaluate this possibility as well as other alternatives for the company.
The company retained Credit Suisse and Evercore Partners as its financial advisors. The Supervisory Board
and Executive Board engaged NM Rothschild & Sons to provide additional financial advice.
On January 16, 2006, the company announced that it had received a non-binding proposal to purchase the company
for EUR 28.00 to 28.50 per common share from a private-equity consortium consisting of affiliated funds of
AlpInvest Partners N.V., The Blackstone Group L.P., The Carlyle Group, Hellman & Friedman LLC, Kohlberg Kravis
Roberts & Co. L.P., Permira Advisors Ltd. and Thomas H. Lee Partners, L.P. Permira later withdrew from the
group. VNU said it would proceed with discussions with this private-equity consortium as VNU continued to
weigh alternatives and fully and fairly evaluate what course of action will serve the best interests of the
company's stakeholders. During this period, a second private-equity consortium indicated that it was not
prepared to further consider at that time a potential acquisition of VNU at a comparable valuation.
On February 7, 2006, the company announced that it would continue its talks with the private-equity group.
The Supervisory Board met again on February 28, 2006, to discuss the transaction and alternatives and review
reports prepared by the financial advisors. On Tuesday, March 7, 2006, the Supervisory Board met and, after
carefully considering all options available to the company, unanimously concluded that this transaction was
in the best interests of VNU's stakeholders. Credit Suisse and NM Rothschild & Sons both delivered opinions
to the effect that, based upon and subject to the matters considered, assumptions used and qualifications
set forth in these opinions, the consideration offered per ordinary share is fair, from a financial point
of view, to the holders of ordinary shares.
Stand-alone Analysis
Over the past six months, VNU has worked on a stand-alone operating
plan that includes Project Forward, a three-year program that is targeting annualized cost savings of EUR
125 million incremental to the current operating plans of VNU's business units.
The Executive and Supervisory Boards considered the potential value creation as a stand-alone public company,
and believe that the Offer is more attractive to shareholders, taking into account:
- Business Opportunities and Challenges: In addition to the operating and cost savings opportunities, VNU's
businesses face challenges such as price compression in its Marketing Information group, and rapid technological
change affecting each of its business units.
- Execution Risk: Achieving the projections and cost savings is uncertain and may be more difficult to
achieve as a public company.
- Valuation: The Offer represents an attractive multiple on historical and projected cash flows, even assuming
Project Forward and the company's long-term operating plan are fully achieved.
After taking into account the opportunities and risks as a stand-alone company, the Supervisory and Executive
Boards came to the conclusion that the Offer by the private-equity consortium is in the best interests of
shareholders, clients and employees.
Break-up Analysis
Before committing to the private-equity offer, the Supervisory and Executive
Boards also thoroughly analyzed the risk-reward benefits of breaking up the company. The Boards determined
that pursuing a break-up would not be as attractive to shareholders as a sale of VNU in a single transaction,
particularly after taking into account the time value of money and substantial valuation and execution risks,
including:
- Uncertain completion: No other offers currently exist for the businesses, and there would be both timing
and achievability risks to obtain such offers at reasonable valuations.
- Loss of economies of scale: A substantial portion of the Project Forward cost savings opportunities available
to VNU may not be obtainable if the company were split apart. In addition, any business units that become
standalone companies would incur incremental expenses, including those associated with being a public company.
- Adverse tax effects: There would be adverse tax effects on a sale or potential spin-off of VNU's businesses.
Additionally, the company enjoys certain tax advantages as a Dutch company that would not be available
to spin-off companies based in the U.S.
- Negative client reaction: VNU has been working with major clients to create unique combinations of its
marketing, media and consumer information. Clients understand the advantages VNU brings to creating integrated
services and they prefer that the company remain together.
- Distraction cost: A break-up of the company could take an extended period of time to complete, disrupting
management and employees and potentially damaging client relationships.
Based on this analysis, the Supervisory and Executive Boards came to the conclusion that breaking up the
company would not be in the best interests of VNU´s shareholders, clients and its employees.
Financial advisory services have been provided to the Offeror by JPMorgan and ABN AMRO Bank, along with
Deutsche Bank, Citigroup and ING. Citigroup, Deutsche Bank and JPMorgan, along with ABN AMRO Bank and ING,
will provide financing for the transaction.
Simpson Thacher & Bartlett LLP and De Brauw Blackstone Westbroek N.V. provided legal counsel to VNU. Clifford
Chance LLP and Latham & Watkins LLP acted as legal advisors to the private-equity consortium.
This announcement is a public announcement as referred to in section 9b, par. 2(a), of the Dutch Securities
Trading Supervision Decree (Besluit Toezicht Effectenverkeer 1995).
Forward-looking Statements
This document contains forward-looking statements. These statements may be identified by words such as 'expect', 'should', 'could', 'shall' and
similar expressions. These statements are subject to risks and uncertainties, and actual results and events
could differ materially from what presently is expected. Factors leading thereto may include without limitations
general economic conditions, conditions in the markets VNU is engaged in, behavior of customers, suppliers
and competitors, technological developments, as well as legal and regulatory rules affecting VNU's business.
Today's Investor and Media Events
VNU will host a meeting for the investment community and media today, March 8, at 10:00 a.m. (CET) to discuss
this press release and the company's 2005 results. At 4:00 p.m. (CET), VNU will conduct a conference call
for investors. Both events will be conducted in English. The morning meeting will be video-webcast and
the afternoon conference call will be audio-webcast at www.vnu.com. An archive of both webcasts will be
available on VNU's web site after the events. For more information, contact Mark Walter at +44 (0) 207
614 2900 or Laura Martin at +1 212 889 4350, both of Taylor Rafferty Associates.
About VNU
VNU is a global information and media company with leading market positions and recognized brands in marketing
information (ACNielsen), media measurement and information (Nielsen Media Research) and business information
(Adweek, Billboard, The Hollywood Reporter, Computing, Intermediair).
VNU is active in more than 100 countries, with headquarters in Haarlem, the Netherlands and New York, USA.
The company employs nearly 41,000 people. Total revenues were EUR 3.5 billion in 2005. VNU is listed on the
Euronext Amsterdam (ASE: VNU) stock exchange. For more information, please visit the VNU web site at www.vnu.com.
About the Consortium
AlpInvest Partners
AlpInvest Partners is one of the largest private equity investors in the world with over EUR 30 billion of
assets under management. Approximately 80% of these funds are invested by AlpInvest Partners in private
equity funds globally, with the remainder invested directly in companies as a co-investor in Europe and
the US. AlpInvest Partners has approximately 55 investment professionals based in Amsterdam and New York.
Its shareholders and main clients are ABP and PGGM, two of the largest pension funds in the world with
respectively EUR 187 billion and EUR 69 billion of assets under management (as per September 2005). www.alpinvest.com
The Blackstone Group
The Blackstone Group, a leading investment and advisory firm with offices in New York, Atlanta, Boston, Los
Angeles, London, Hamburg, Paris, and Mumbai, was founded in 1985 and has raised over $50 billion for alternative
asset investing. Blackstone has completed or committed to 96 private equity transactions with a total transaction
value of US$138 billion. In addition to private equity investments, Blackstone's core businesses include
real estate investments, corporate debt investments, distressed debt, marketable asset management, corporate
advisory services and restructuring advisory services. Blackstone's Private Equity Group has been a long-time
investor in media and communications and seeks to partner with and support outstanding management teams
in creating long-term value in market-leading businesses. Notable investments in the communications and
media industries include: Bresnan Communications, Columbia House, Houghton Mifflin, Freedom Communications,
Montecito Broadcasting Group, New Skies Satellites, Sirius Satellite Radio, SunGard Data Systems and Susquehanna
Radio. www.blackstone.com
The Carlyle Group
Carlyle is a global private equity firm with approximately US$35 billion under management. Carlyle invests
in buyouts, venture capital, real estate and leveraged finance in North America, Europe and Asia. Since
1987, the firm has invested approximately US$15 billion of equity in over 440 transactions. The firm conducts
its investment activities through focused industry groups that leverage the extensive operating, corporate,
and government experience of its partners. Media and Telecom is a long-standing area of investment focus
for Carlyle. Currently, Carlyle's Media and Telecom group is anchored by 16 investment professionals primarily
focused on completing leveraged acquisitions in partnership with strong management teams. Carlyle's recent
media and telecom investments include: Casema, Dex Media, Hawaiian Telcom, Insight Communications, Loews
Cineplex, PanAmSat and WILLCOM.
Hellman & Friedman
Hellman & Friedman LLC is a leading private equity investment firm focused on investing in superior business
franchises and as a value-added partner to management in select industries including media, information services,
financial services, professional services and energy. Since its founding in 1984, the Firm has raised and,
through its affiliated funds, managed over US$8 billion of committed capital. The Firm has offices in San
Francisco, New York and London. The Firm's marketing services and media investments include Axel Springer
AG, ProSiebenSat.1, Formula One, DoubleClick, Eller Media, Advanstar, Young & Rubicam and Digitas.
Kohlberg Kravis Roberts & Co
KKR, founded in 1976, is one of the world's oldest and most experienced private equity firms. KKR specializes
in management buyouts, and has established itself as the largest and most active participant in the industry.
KKR's investing activities are made on behalf of itself and its investors. These institutional investors
include state and corporate pension funds, banks, insurance companies, other financial institutions, and
university endowments.
Since its founding, KKR has completed approximately 140 transactions globally with a total value of approximately
US$186 billion. Some of KKR's current investments include TDC, VendexKBB, SBS Broadcasting, PanAmSat and
SunGard Data Systems. Other notable transactions include RJR Nabisco, Duracell, Safeway, Autozone, Willis,
Stop & Shop, Yellow Pages Group, Legrand and Storer Communications.
Thomas H. Lee Partners
Thomas H. Lee Partners, L.P. is one of the oldest and most successful private equity investment firms in
the United States. Since its founding in 1974, THL Partners has invested over US$10 billion of equity capital
in more than 100 businesses with an aggregate purchase price of more than US$70 billion, completed over
200 add-on acquisitions for portfolio companies, and generated superior returns for its investors and partners.
THL Partners identifies and acquires substantial ownership positions in large growth-oriented companies
through acquisitions, recapitalizations and direct investments.
The firm currently manages approximately US$12 billion of committed capital, including its most recent fund,
the US$6.1 billion Thomas H. Lee Equity Fund V. Notable transactions sponsored by the firm include American
Media, Fisher Scientific, Grupo Corporativo ONO, Houghton Mifflin, Nortek, ProSiebenSat.1, Snapple Beverage,
Spectrum Brands, Transwestern Publishing, Warner Chilcott and Warner Music Group.
VNU Contacts
- Press contact
- Will Thoretz
- Haarlem
- +31 23 5463 600
Investor Relations
- Peter Wortel
- Arnout Asjes
- Haarlem
- New York
- +31 23 5463 692
- +1 646 654 5031
Consortium Press Contacts
- Kekst & Co.
- Ruth Pachman
- New York
- +1 212 521 4891
- M: Communications
- Hugh Morrison
- London
- +44 207 153 1534
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