UPDATE 4-Nielsen files for up to $1.75 bln IPO

* J.P. Morgan, Morgan Stanley are lead underwriters

* Nielsen’s top clients include Coca-Cola, NBC, Nestle
(Adds analyst comment)

By Paul Thomasch and Clare Baldwin

NEW YORK, June 3 (BestGrowthStock) – Nielsen Holdings B.V. plans to
raise up to $1.75 billion in an initial public offering,
becoming the latest private-equity backed company to sell
shares into a fragile market.

Nielsen is best known for its viewership ratings, which
often determine the fate of TV shows. Its top 10 clients — who
account for about 23 percent of its business — include
Coca-Cola Co (KO.N: ), NBC Universal, Nestle S.A. (NESN.VX: ), News
Corp (NWSA.O: ), Procter & Gamble Co (PG.N: ) and Unilever
(ULVR.L: ).

The Dutch company was taken private in a $10-billion deal
in 2006 by a group of private equity firms. Kohlberg Kravis
Roberts & Co [KKR.UL] and Thomas H. Lee Partners [THL.UL] first
approached management and formed the rest of the consortium.
THL and KKR each have about 20 percent stakes, as do Blackstone
Group (BX.N: ) and Carlyle Group [CYL.UL].

Among the others, Hellman & Friedman owns about 9 percent
and AlpInvest Partners about 7 percent. The rest of the company
is held by management team and other directors.

Nielsen, which is loaded down with debt, declined on
Thursday to comment on how many shares would be sold, whether
they would be newly issued, or the timing of the sale.

“Nielsen, albeit a premier name in global information and a
go-to name by some of the biggest corporations, has shown flat
revenue, continued losses and extraordinarily large debt.
Coupled with an unusual number of private equity backers, this
should translate to a tough sale,” said Scott Sweet, senior
managing partner at IPO Boutique.

The U.S. market for initial public offerings has slowed,
with many deals cut or shelved as investors protect their
portfolios and wait to see if Europe’s debt crisis will stall
economic recovery.

That hasn’t stopped private equity portfolio companies from
starting the IPO process. Toys R Us last week filed to raise as
much as $800 million. Hospital operator HCA Inc and Dutch
semiconductor company NXP Semiconductors also recently filed to
go public. Coffee chain Dunkin’ Donuts is also considering an
IPO, analysts said.

Recent private-equity backed IPOs have flopped because they
were seen as too highly leveraged exit vehicles for buyout

Nielsen, which has lost money every year it has been
private, made clear in its filing with regulators that the
proceeds from the IPO would be used to help pay down debt that
stood at nearly $8.6 billion as of March 31.

It also said that some proceeds would be used for general
corporate purposes.

One big hurdle for the company is that it’s not making
enough money to service a debt load it characterizes as

Indeed, Nielsen’s annual earnings before interest payments
and taxes, or operating income, has ranged between $116 million
and $420 million since 2007. That compares with the company’s
interest expense, which has been at least $647 million a year.

While the company has long dominated the market for
audience measurement — its ratings are the standard used by TV
networks and advertisers to help determine commercial rates —
it has lately faced some fresh competition and concerns that
its data does not fully reflect new viewing patterns.

In one instance, a group of top media companies, including
Time Warner Inc (TWX.N: ) and News Corp (NWSA.O: ), is devising new
ways to measure audiences, taking into account major shifts in
viewing habits, such as audiences using the Web and digital
video recorders (DVRs) to watch programs at their leisure.

Nielsen paid $34 million in management fees to its private
equity backers in 2007, 2008 and 2009 and is on track to pay an
additional $12 million in 2010.

After the IPO, the management agreement will end. Even so,
Nielsen will still owe the firms the money it would have
otherwise paid them over the life of the contract, or around
eight years.

J.P. Morgan Securities and Morgan Stanley are the lead
underwriters of the IPO.

Stock Investing

(Additional reporting by Franklin Paul and Dan Wilchins in New
York and S. John Tilak in Bangalore; Editing by John Wallace,
Derek Caney and Gunna Dickson)

UPDATE 4-Nielsen files for up to $1.75 bln IPO