Information Consolidation

Michael Hedges April 18, 2005

The bidding for NOP World is over and GfK pays cash: €550 million.

United Business Media announced agreement with GfK Group Friday (April 15) for the sale of its NOP World division. GfK Group will pay cash at closing, once the transaction passes regulators in the US and Germany, expected by the end of May.

United Business Media (UBM), a UK business publisher, put NOP World up for bidding in January. Several major market and business research companies expressed interest in NOP World, currently ranked 10^th in that industry, including Ipsos, Aegis, TNS and WPP Group.  The bid from Ipsos is thought to have fallen short by €50 million, according to French advertising sources.

Incoming UBM CEO David Levin said in a company press release the “transaction creates a more focused UBM which can continue to develop its global publishing interests.” Earlier this month UBM acquired DotNetJunkies.com and SqlJunkies.com, website communities for Microsoft developers. UBM owns PR Newswire and a 35% stake in UK Channel 5 Television, widely expected to be unloaded to RTL. Its current restructuring is expected to yield greater concentration on business-to-business media.

GfK CEO  Klaus Wuebbenhorst was quoted Thursday in the German newspaper Handlesblatt saying he wanted to build GfK into a billion euro business. GfK has pursued an aggressive acquisition strategy. More than half of the company’s 2004 profit, €52.6 million, came from acquisitions. The NOP World purchase is GfK’s largest since being publicly listed.

The market leader in the information services sector is the Dutch publisher VNU, owner of AC Nielsen and Nielsen Media Services, with 2004 revenue at €2.8 billion. The world-wide market for information services is estimated at €17 billion.

NOP World is known for custom research, media and healthcare research in the US, UK and Italy.

The media side, GfK will now own the Italian company Eurisko, which NOP World purchased in December 2003. Eurisko has developed and markets the World Media Monitor, a passive, electronic measurement device similar to the GfK marketed RadioControl/MediaControl watch. Both devices, as well as Arbitron’s Personal People Meter (PPM), were subjected late last year to a comparative evaluation by the UK Radio Joint Audience Research (RAJAR) organization. When the results were made public in February GfK withdrew its device from bidding for the RAJAR contract, its inventor criticizing the evaluation process. The Eurisko device received high marks in the RAJAR evaluation. GfK purchased Telecontrol, the inventor and developer of the RadioControl watch device in 2001.

NOP World was purchased by UBM in 1989. Its 2004 revenue was €321 million, according to the Friday (April 15) press release.

Media planning group Aegis pulled out of the bidding for NOP World in late February, after the first round. Aegis CEO Robert Lerwill, quoted in timesonline, said “I think it’s probably of more value to other people.” Aegis owns Carat, Europe’s largest media buying agency.