Rentrak & comScore ink merger deal

MUMBAI: In a bid to give strong competition to Nielsen, which has been the industry leader in ratings measurement since time immemorial, Rentrak Corporation and comScore Inc have entered into a merger agreement. Under the agreement, the two measurement companies will combine in a stock-for-stock merger.

It may be recalled that closer home in India, television ratings measurement agencies Broadcast Audience Research Council (BARC) India and TAM India also joined hands only last month to form a new JV meter management company.

Rentrak will merge into a wholly-owned subsidiary of comScore pursuant to the terms of the merger, which has been approved by the Boards of Directors of both companies. Each share of Rentrak will be converted into the right to receive 1.15 shares of comScore. Upon completion of the merger, comScore shareholders are expected to own approximately 66.5 per cent and Rentrak shareholders are expected to own approximately 33.5 per cent of the combined company on a fully diluted basis.

The deal, which is expected to close early next year, values Rentrak at approximately $827 million. The combined valuation of the two companies is being pegged at $2.4 billion.

comScore CEO Serge Matta will head the new combined company as CEO, whereas Rentrak vice chairman & CEO Bill Livek will become executive vice chairman & president of the new company.

On the other hand, Mel Wesley will continue as the CFO and Rentrak's current COO & CFO David Chemerow will serve as a strategic advisor to the CEO, focused on the successful integration of the two companies.

The new company will also draw upon the collective talent at both companies to harness the experience and expertise of each organisation to redefine the future of measurement. The combined company's board will consist of twelve directors - eight from comScore and four from Rentrak.


Strategic Rationale

By combining comScore and Rentrak's products, talent and significant information assets, the new company will provide even more robust measurement solutions to the media and advertising industries, following the consumer whenever and wherever content is consumed.

The combination will enable the company to introduce a more comprehensive and precise set of solutions for measuring media consumption and advertising across platforms, setting the standard for the next generation of cross-platform measurement solutions. Together, comScore's digital audience and advertising solutions, combined with Rentrak's census-based worldwide movie and video-on-demand measurement, and its massive and passive TV measurement offerings, will provide a more complete picture of the way people consume media today and in the future. The combined organization is expected to possess a unique breadth of knowledge, experience, expertise, and skill sets that cannot be duplicated, dramatically enhancing the range of capabilities and offerings for clients and the industry.

"The merger of comScore and Rentrak represents an exciting milestone for our combined clients, uniquely skilled employees and shareholders. Together we have an even more powerful ability to deliver what our clients and the media industry have long been asking for: a comprehensive cross-platform measurement currency that accounts for all the ways in which content is consumed, whether that happens on a desktop, mobile device, live or time-shifted TV, video on demand or through over-the-top devices," said Matta.


"With the advent of digital technology, the time has come to offer the cross-platform measurement systems of the future: through which content owners will ultimately be able to quantify their entire audience, and agencies will have access to the cross-platform metrics needed to effectively plan and execute campaigns. This merger also recognizes the critical importance of combining digital and TV assets for next generation media measurement, which requires a higher degree of precision at both a national and local market level," he added.

"Both companies have been innovators in content and consumer measurement, advanced demographics and analytics, providing the industry with world-class digital, TV and movie consumption information. This merger will accelerate the pace of that innovation, and offer an improved solution for cross-platform measurement, not available anywhere else. Rentrak's expertise in precisely measuring TV and movies, and comScore's industry-leading digital measurement capabilities, are natural complements. Combined, our expertise and information assets will enable us to provide the industry with the most granular measurement solutions that reflect the ever-changing way that people are consuming content across platforms," Livek said.

"Bill Livek and his team have built a cutting-edge media measurement company that has moved our industry forward in many ways, and we could not be more excited to welcome them to the comScore family. We look forward to working with Bill and his team as we bring our companies together to create the most comprehensive set of measurement solutions available, delivering on our mission of making audiences and advertising more valuable," said Abraham.


Financial considerations

comScore expects the transaction to be mildly dilutive to its Non-GAAP EPS in 2016, and accretive in 2017. The combined company is expected to have total synergies of at least $20 million in 2016 and at least $35 million in 2017. The company also anticipates a significant portion of the synergies to be revenue related, which it expects to grow over time with an attractive contribution margin.

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