PE-backed IPO of Nielsen grosses $1.6bn

The television viewership tracking company, owned by a consortium of firms including Blackstone, Carlyle and KKR, has grown in further value after eclipsing its original share price.

Perhaps in a sign of things to come, a consortium of firms have launched one of the biggest US private equity-backed floats. TV ratings and research company Nielsen Holdings priced its initial IPO share price above its anticipated range at $23 this week.

Earlier this month the company set the price band for its proposed IPO between $20 and $22 per share, according to a regulatory filing. Nielsen will receive roughly $1.56 billion through its listing on the NYSE, the company said in a statement. Coffers will also be filled through a bond offering pulling in roughly $240 million. Nielsen said they intend to use the proceeds to repay a portion of some of its outstanding debt.

Shares of Nielsen Holdings were trading at $25.40 at the time of press, roughly 10 percent above their initial public offering price.

A consortium of big name private equity shops took Nielsen private in 2006 in a deal worth roughly $10 billion. Kohlberg Kravis Roberts, Thomas H. Lee Partners, The Carlyle Group and The Blackstone Group each owned roughly 20 percent of Nielsen’s shares prior to the IPO. They were joined by Hellman & Friedman and AlpInvest Partners, both of which owned less than ten percent of shares prior to the float.

Before the IPO’s launch, each of the private equity firms investing in Nielsen received a $7 million dividend, according to the filing. Though Nielsen “does not expect to pay any similar dividends in the foreseeable future”.

Underwriters of the IPO were led by JPMorgan and Morgan Stanley.

The success of the launch may give inspiration to other private equity sponsors planning to float their portfolio companies. Waiting in the wings is Bain Capital- and Kohlberg Kravis Roberts-backed Toys R Us, which filed to raise up to $800 million. The two private equity firms are also behind what is expected to be one of the largest private equity-backed IPOs this year: the listing of hospital chain HCA, which filed to raise up to $4.6 billion last year.