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Rentrak Buys Kantar Media for $98M

Just hours before it was scheduled to ring the opening bell at the NASDAQ Exchange today, measurement company Rentrak rang a few bells of its own, announcing that it has acquired the U.S. Television measurement business from Kantar Media for $98 million in stock and signing an exclusive deal with ad buyer Group M to become the local currency for its TV clients.

Both deals help solidify Rentrak as a solid player in the TV measurement business, a segment that has grown exponentially for the company since CEO Bill Livek joined the Portland, Ore., firm in 2009. The news also comes as Rentrak prepares for its annual Investor Day at NASDAQ headquarters in New York, beginning at 1 pm.

The Kantar transaction will only include the company's U.S. TV measurement business. As part of the deal, Rentrak will also integrate its national and local TV measurement with a number of Kantar’s U.S.-based services that focus on digital media, advertising expenditure and purchase data. The integration will provide advertisers, agencies, TV networks, multichannel video program distributors (MVPDs) and local television stations throughout the U.S. with tools to understand consumers’ purchasing habits and the ability to link TV viewing habits with purchase and other behavior in the United States.

“The combined expertise of Kantar and Rentrak will enable clients to better comprehend and leverage the relationship between United States TV viewing and brands,” said Kantar CEO Eric Salama in a statement. “We are excited about the future products that we can develop with Rentrak for the U.S. television industry.  Clients will benefit from our focus on respondent-level media and purchase data.”

The deal terms involve about 1.53 million Rentrak shares, or 12.4% of Rentrak’s total shares outstanding.  As part of the agreement, Kantar parent WPP will also purchase shares directly from the company for $56 million in cash, giving WPP a final ownership stake of 16.7% of Rentrak’s stock. WPP may also purchase Rentrak shares on the open market so long as its total ownership of Rentrak stock does not exceed 20%.

“This agreement is designed to help all of our U.S. agency and TV advertiser clients with new services in television measurement and consumer insights,” said Rentrak’s Vice Chairman and Chief Executive Officer Bill Livek in a statement. “We are thrilled to be working with WPP and look forward to partnering with Kantar to provide the marketplace with the best next generation of services.”
Goldman, Sachs & Co. served as financial advisor to Rentrak.

With Group M, Rentrak adds its second top ad agency in a week -- it announced a deal with Zenith Media earlier -- to utilize its set-top box-based data.

GroupM manages $105 billion in media billings globally and serves as parent company to MindshareMECMediaCom and Maxus.  With this deal. Rentrak claims it has contracts with all of the largest agency holding companies.

“Rentrak is thrilled to work with GroupM and its agencies, and that they will use our services for the benefit of their clients,” Livek said in a statement. “This partnership will help our customers achieve maximum profitability.”

GroupM and its agencies will have full access to Rentrak’s TV viewing information and will, over time, use the data broadly. The agency will utilize the measurement company's advanced analytics in automotive and other categories on a local and national basis. On Demand and multi-platform data will be used to provide a more complete picture of television viewing patterns. In addition, Rentrak’s data will be used to quantify viewing levels in more than 200 networks that are not currently measured by the legacy sample currency, as well as in local markets.

“The proliferation of channels has so significantly fragmented audiences that legacy sample methodology simply can’t keep up,” said Irwin Gotlieb, global chairman of GroupM in a statement. “Television measurement needs to move toward census-based methodology. Our agencies are doing such refined targeting and segmentation, and that work can only be supported by census data. It is our hope that we can act as catalysts in moving the industry toward greater data reliability and accountability.”