US media analytics firms ComScore, Rentrak to merge in $800-mn deal

US media industry analytics firms ComScore Inc and Rentrak Corp have agreed to merge their businesses in an all-share transaction valued at over $800 million, aiming to create a leading cross-platform measurement company to take on rival Nielsen Holdings Plc.

Both the companies are engaged in measuring and analysing the ways in which contents viewed on TV, video on demand, desktop, mobile, over-the-top devices or movie theatre, are consumed.

Under the terms of the deal, Rentrak shareholders will receive1.15 shares of ComScore.

Further to the news of the deal, ComScore shares jumped over 8 per cent to $45 during extended trading hours on Nasdaq yesterday while shares in Rentrak surged 13 per cent to $49.

Virginia-based ComScore, established in 1999, was the first company to provide unduplicated, person-based reporting of audiences across TV, smartphone and tablet. The company helps over 2,500 global clients understand their audiences, know if their advertising is working, and access valuable data.

Rentrak, headquartered in Oregon, measures actual viewing behaviour of TV and movies worldwide providing information to entertainment and advertising industries. The firm was the first to report TV ratings using set-top box data as core asset.

According to the companies, ComScore will combine its data on computers, smartphones and tablets with Rentrak's capabilities in movies, on TV and video on demand.

The merger is expected to expand measurement solutions for television and advertising industries.

ComScore's chief executive officer Serge Matta said,''The merger of ComScore and Rentrak represents an exciting milestone for our combined clients, uniquely skilled employees and shareholders.''

''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,'' he added.

Rentrak chairman and CEO Bill Livek said the merger would accelerate the pace of innovation in content and consumer measurement and offer an improved solution for cross-platform measurement, not available anywhere else.

The transaction, which has been approved by the boards of both the companies, is expected to close in early 2016, subject to customary closing conditions and regulatory approvals.

Upon merger Matta will lead the merged company as CEO. ComScore's executive chairman Magid Abraham will continue in position, while Rentrak's Livek will serve as the new entity's executive vice chairman and president.

Upon completion of the transaction, ComScore shareholders will own approximately 66.5 per cent of the combined entity while Rentrak shareholders will own the remaining 33.5 per cent.

The transaction is expected to be mildly dilutive to its 2016 earnings and accretive in 2017. The merger is expected to yield total synergies of about $20 million this year and $35 million next year, the companies said.

JP Morgan Securities LLC served as financial advisor to ComScore on the deal, while Rentrak was advised by Goldman, Sachs & Co.