NEW YORK After months of negotiations, Interpublic Group has agreed to sell its NFO WorldGroup market research organization for $425 million to Taylor Nelson Sofres, IPG confirmed on Wednesday.
Taylor Nelson had been the leading bidder for the business [Adweek, April 28]. The negotiated price is well below the $624 million that IPG paid for the company in 2000, but in line with expectations.
Most of the transaction -- $400 million -- will be handled in cash. IPG also agreed to take $25 million in Taylor Nelson stock, thereby keeping a stake in NFO. In addition, IPG will receive $10 million in cash about a year after the close of the sale "subject to the appreciation of the market value of ordinary shares of Taylor Nelson Sofres," IPG said in a statement.
The transaction will result in an accounting gain of about $100 million, which will "substantially offset the pretax costs of achieving the accelerated margin improvement initiatives we are putting into place to restore competitive performance at Interpublic in the second half of the year," IPG CEO David Bell said in the statement.
The deal is expected to close during the summer, pending regulatory approval in the U.S. and Europe.