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Neilsen Expands Watch Segment with Gracenote Acquisition
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Nielsen Holdings plc accelerated its audience measurement efforts with Gracenote buyout. The company will purchase Gracenote from Tribune Media Company for $560 million cash.
Established in 1998, Emeryville, CA-based Gracenote is a leading provider of media and entertainment metadata. The company provides reference information for more than 12 million movie and television listings and 200 million music tracks. Its connected technology is used in over 75 million cars.
Gracenote was first acquired by Sony in 2008 and then by Tribune in 2014. The company has big names such as Apple (AAPL - Free Report) , Spotify, Amazon (AMZN - Free Report) , Tesla BMW, Toyota, Ford and Time Warner Cable on the list of its customers. It is the only global company to provide data in the four largest and popular entertainment categories viz. TV show, song, movie and sports.
How is Neilsen Poised to Benefit?
Nielsen has long been criticized for usage of outdated measurement methodologies. We believe this acquisition is a step on its part to adopt the latest methodologies to keep up with shifting media habits.
We believe that by leveraging Gracenote’s global content database, Neilsen will be able to develop more expansive and detailed tracking methods.
Gracenote will merge with Neilsen’s Watch segment and continue to operate from its Emeryville headquarters. In the last reported quarter, Neilsen’s Watch business revenues were $761million (48%), up 6.4% year over year or 6.7% on a constant currency basis.
The increase came on the back of continued strength in Audience Measurement and Marketing Effectiveness, which improved 8.5% and 31.8%, respectively, on a constant currency basis.
Neilsen expects the acquisition to be neutral to 2017 GAAP earnings per share and slightly accretive in 2018.
Nielsen has been supplementing organizational growth with strategic acquisitions. The company has spent millions on acquisitions to enable broader measurement of consumer media as well as buying behavior of consumers. In March this year, the company completed its acquisition of eXelate, a provider of data and technology, enabling clients to make better and faster marketing and media decisions.
In late 2013, Nielsen completed the purchase of Arbitron, an international media and marketing research firm, for about $1.3 billion in cash. The acquisition enabled Nielsen to introduce audio measurement capabilities in new markets.
In 2011, the company acquired NeuroFocus, a leader in developing neuroscience to better understand how consumers engage with advertising, messaging, packaging, product development and entertainment content.
Nielsen is leaving no stone unturned to provide clients with greater insight and understanding of the factors that drive consumer behavior across media platforms and retail channels.
Year to date, the stock has underperformed the Zacks Business Information Services industry. It has lost 7.1% compared to the industry’s gain of 0.30%.
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Neilsen Expands Watch Segment with Gracenote Acquisition
Nielsen Holdings plc accelerated its audience measurement efforts with Gracenote buyout. The company will purchase Gracenote from Tribune Media Company for $560 million cash.
Established in 1998, Emeryville, CA-based Gracenote is a leading provider of media and entertainment metadata. The company provides reference information for more than 12 million movie and television listings and 200 million music tracks. Its connected technology is used in over 75 million cars.
Gracenote was first acquired by Sony in 2008 and then by Tribune in 2014. The company has big names such as Apple (AAPL - Free Report) , Spotify, Amazon (AMZN - Free Report) , Tesla BMW, Toyota, Ford and Time Warner Cable on the list of its customers. It is the only global company to provide data in the four largest and popular entertainment categories viz. TV show, song, movie and sports.
How is Neilsen Poised to Benefit?
Nielsen has long been criticized for usage of outdated measurement methodologies. We believe this acquisition is a step on its part to adopt the latest methodologies to keep up with shifting media habits.
We believe that by leveraging Gracenote’s global content database, Neilsen will be able to develop more expansive and detailed tracking methods.
Gracenote will merge with Neilsen’s Watch segment and continue to operate from its Emeryville headquarters. In the last reported quarter, Neilsen’s Watch business revenues were $761million (48%), up 6.4% year over year or 6.7% on a constant currency basis.
The increase came on the back of continued strength in Audience Measurement and Marketing Effectiveness, which improved 8.5% and 31.8%, respectively, on a constant currency basis.
Neilsen expects the acquisition to be neutral to 2017 GAAP earnings per share and slightly accretive in 2018.
NIELSEN HOLDNGS Revenue (TTM)
NIELSEN HOLDNGS Revenue (TTM) | NIELSEN HOLDNGS Quote
Our Take
Nielsen has been supplementing organizational growth with strategic acquisitions. The company has spent millions on acquisitions to enable broader measurement of consumer media as well as buying behavior of consumers. In March this year, the company completed its acquisition of eXelate, a provider of data and technology, enabling clients to make better and faster marketing and media decisions.
In late 2013, Nielsen completed the purchase of Arbitron, an international media and marketing research firm, for about $1.3 billion in cash. The acquisition enabled Nielsen to introduce audio measurement capabilities in new markets.
In 2011, the company acquired NeuroFocus, a leader in developing neuroscience to better understand how consumers engage with advertising, messaging, packaging, product development and entertainment content.
Nielsen is leaving no stone unturned to provide clients with greater insight and understanding of the factors that drive consumer behavior across media platforms and retail channels.
Zacks Rank and Share Price Movement
Currently, Neilsen has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Year to date, the stock has underperformed the Zacks Business Information Services industry. It has lost 7.1% compared to the industry’s gain of 0.30%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>