KKR successful in GFK share purchase

Greg Gille
13 February 2017

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KKR has made a successful public tender offer for an 18.54% stake in German market research business GFK.

KKR launched its bid for a minority stake in GFK in December, offering €43.5 per share via the Acceleratio Capital holding, representing a premium of around 44% on the volume-weighted average share price for the last three-month period leading up to the bid. The offer was conditional upon an 18.54% acceptance threshold being met. The deal was at the time reported to value the company at €1.59bn, with KKR's purchase valued at around €290m.

GFK shareholders that have not accepted the offer within the acceptance period can still do so between 16 February and 1 March on the same terms.

GFK stock jumped on the morning of Monday 13 February following the announcement, with the share price hitting a high of €44.75. The company's majority shareholder remains GFK Verein.

The company underwent a rough spot last year, with adjusted operating income diving by 18%, down to €154m. The profit margin contracted from 12.2% to 10.4%, with sales down 3.8%.

"2016 was a difficult year for us," management board speaker Gerhard Hausruckinger said in a statement issued in January 2017. "We had to post reduced sales in the ad hoc business and are in the process of refocusing key major media projects to achieve long-term success. At the same time, we have strengthened our digital business through targeted acquisitions. We divested less promising activities. This is why we have not achieved our margin targets."

KKR has previous experience of turning around struggling market research businesses, having taken part in an investment in, and subsequent listing of, Nielsen Holdings.

Company
GFK is a provider of market research, indices and audience ratings for the media industry. The company stated it would look to use the fresh capital to focus on big data research to analyse consumer demand.

GFK posted a €1.48bn turnover in 2016, with adjusted operating profit of €154m.

People
KKR – Philipp Freise (head of TMT Europe).

Advisers
Equity – JP Morgan (M&A).
Company – Deutsche Bank (M&A).