ComScore, Rentrak to MergeSeptember 30, 2015 | By Fluent
Publication date 9/30/15
TV measurement firm comScore said it will merge with Rentrak in an all-stock deal valued at about $779 million that will create a formidable No. 2 to industry giant Nielsen.
The combination seems complementary – comScore’s expertise lies in digital measurement while Rentrak bases much of its data collection on set-top box data – and seems to address what is the burning question in the measurement industry of late: how to more effectively and efficiently track viewership across multiple devices and screens. And already industry executives are chiming in on the significance of the deal.
“This deal highlights the sea change occurring across the video consumption landscape and the potential opportunities that exist,” said Fluent EVP for Product and Technology Sean Cullen in an e-mail message. “ComScore is a company rooted in digital tracking and measurement, and they must see the opportunity that exists to take marketshare in the realm of online video consumption.”
Investors seemed pleased with the deal too, driving comScore shares up more than 7% ($3.03 each) to $44.50 per share in after-hours trading, while Rentrak rose nearly 13% ($5.60 each) to $48.99 per share.
On a conference call with analysts to discuss the deal, Rentrak vice chairman and CEO Bill Livek, who will remain with the combined company as executive vice chairman and president, said the merger is a next logical step toward cross platform measurement.
“What this merger is about is giving the clients what they have been asking for,” Livek said on the call.
ComScore has collaborated on some cross platform measurement, through Project Blueprint, launched last year to provide data to ESPN.
Nielsen has planned to release its own Total Audience Measurement product by the end of the year, which it claims will provide more robust data, including demographic information.
“Nielsen has the only Total Audience measurement, comparable across all screens,” Nielsen said in a statement. “All of our data is fully representative of the U.S. population, and we deliver truly independent measurement. There are myriad analytics options for the media industry, but Nielsen’s focus is on delivering the actual currency ratings data used for trading billions of dollars in advertising. This requires superior quality, industrial-strength delivery, and gold-standard audited processes and methods.”
Rentrak has been aggressive in reaching deals with broadcasters and cable operators for measurement data – it landed a deal with AMC Networks for cross-platform data just last week. Last year it reached a landmark deal with ad behemoth WPP, agreeing to purchase the U.S. TV assets of its Kantar Media division as well as a deal with ad buyer Group M to provide local and national data tools. Those deals came on the heels of a pact with Zenith Media to test Rentrak data in several markets as the basis for buying and planning local ads for its clients.
In a note to clients after the AMC deal was announced, Telsey Advisory Group media analyst Tom Eagan wrote that Rentrak could participate in the creation of a new platform measurement metric and ultimate a new currency for the advertising community. IN the mote, which came out before the comScore deal was announced, Eagan opined that he wouldn’t be surprised if Rentrak and ComScore “partnered to create a more robust cross-platform currency.”
“The merger of comScore and Rentrak represents an exciting milestone for our combined clients, uniquely skilled employees and shareholders,” comScore CEO Serge Matta, who will remain CEO of the combined company, said in a statement. “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 added. “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.”
According to the deal Rentrak shareholders will receive 1.15 shares of comScore for every Rentrak share they own. After the deal is done, comScore shareholders will own about 65.5% of the combined company, with Rentrak shareholders controlling the remaining 33.5%.
In addition to Matta and LIvek staying on with the new company, other top executives remaining with the combined company are Dr. Magid Abraham will remain as the Executive Chairman of the Board. 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 combined company’s board will consist of twelve directors – eight from comScore and four from Rentrak.
“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 in a statement. “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.”