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ComScore to buy Rentrak for $771mn

September 30
9:48 PM 2015

ComScore Inc, a data analytics provider and a major player in web tracking, will acquire Rentrak Corp for an implied value of $771 in all stock deal. Rentrak offers viewership rating services. As part of the buying deal, every share of Rentrak will be converted into 1.15 shares of ComScore. After the buying process, Rentrak will become a wholly-owned subsidiary of ComScore. The combined entity is expected to become a major measurement system for media and advertisement agencies. The buyout deal is expected to close in early 2016. The combined entity will get cost benefit of $55mn over the next two years.

ComScore Inc has a strong presence in web tracking and expanding into advertising measurement. The latest acquisition of ComScore Inc will pose a major challenge to Nielsen NV, a dominant player in television ratings. The ratings given by Nielsen are considered as currency to determine the ad tariff for commercials. The buyout deal will further strengthen ComScore in commercial ads measurement, display or banner ad analytics. 

Each share of Rentrak will be converted into 1.5 shares of ComScore after the buyout deal. Rentrak's stock was trading at $43.39 and the offered deal is 9.9 percent premium over it. After the deal announcement hit the market, Rentrak shares gained 13 percent and ComScore's stock rose eight percent. 

ComScore estimated that after the deal, it would impact the adjusted earnings per share in 2016 and enhance earnings in 2017. ComScore's Chief Executive Officer Serge Matta will manage the combined entity while Magid Abraham will be Executive Chairman. Rentrak Chief Bill Livek will become President of the combined company.

The merger will enable the combined entity to implement a comprehensive and precise set of solutions for measuring media consumption and advertising across platforms. It would also set the standards for measurement solutions over cross-platform paving the way for next generation commercials.

The combined entity is expected to benefit from cost savings of $20mn in 2016 and $35mn in 2017. Rentak's expertise in TV viewing, DVD sales and movie box office and online activity will enable ComScore set the new standards in commercial ads measurement. 

ComScore shareholders will have 66.5 percent stake in the combined entity while Rentrak shareholders will get the rest of holding. JPMorgan Securities LLC is the advisor on the buyout deal to ComScore. Goldman Sachs & Co is the advisor to Rentrak. The acquisition process is expected to be complete in early next year. 

The combined entity will provide solutions meeting the long-pending requirements of the media and clients. Comprehensive cross-platform measurement currency that takes care of everything the content is consumed across desktop, mobile devices, live or time-shifted TV, video on demand, etc.

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