comScore,
Inc. SCOR and Rentrak Corporation RENT today announced
that the companies have entered into a definitive merger agreement under
which the companies will combine in a stock-for-stock merger.
Pursuant to the terms of the merger, which has been approved by the Boards
of Directors of both companies, Rentrak will merge into a wholly-owned
subsidiary of comScore, and 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% and Rentrak
shareholders are expected to own approximately 33.5% of the combined company
on a fully diluted basis.
Combined Company Management Team and Governance
comScore's current Chief Executive Officer, Serge Matta, will lead the
combined company as CEO. Dr. Magid Abraham will remain as the Executive
Chairman of the Board. Bill Livek, Rentrak's current Vice Chairman & CEO,
will serve as the company's Executive Vice Chairman & President. Mel Wesley
will continue as the Chief Financial Officer, and David Chemerow, Rentrak's
current COO & CFO, 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 organization 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 industry-leading
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 setsthat 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," said Matta.
"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."
"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," Matta said. "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."
"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," Livek said.
"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. "
"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," said Abraham. "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."
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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