Comscore, Inc. (Nasdaq: SCOR) (“Comscore” or the “Company”), a trusted partner for planning, transacting and evaluating media across platforms, today announced investments from Charter Communications, Inc. (together with its affiliates, “Charter”), Qurate Retail, Inc. (“Qurate”) and an affiliate of Cerberus Capital Management, L.P. (“Cerberus”). Specifically, Charter, Qurate and Cerberus each will make a cash investment in exchange for shares of convertible preferred stock (the “Investment,” as more fully described below). Proceeds from the Investment will be used to retire the Company’s existing debt and significantly improve the Company’s financial flexibility and liquidity position.
In connection with the transaction, Charter will provide enhanced access to deidentified and aggregated data sources and rights that provide the Company with richer and more granular consumer-level data sets, to be used in a manner consistent with the companies’ privacy and security policies. This move will accelerate an industry-wide shift to census-based audience viewership, providing advertisers with more reliable audience measurement and analysis. The 10-year Charter license will allow the Company to pursue additional revenue in TV, digital and cross-platform audience and impression-based currency, enhanced addressable advertising capabilities and outcome-based attribution.
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Additionally, further accelerating its efforts to provide advertisers with more reliable measurement, Comscore announced that Comcast Cable Communications (“Comcast”, a subsidiary of Comcast Corporation) will be extending its current data agreement with the Company.
Investment Highlights
- Issuance of convertible preferred stock of $204.0 million ($68.0 million per investor) at $2.47 per share
- Each investor receives 27.5 million convertible preferred shares
- Each investor’s voting rights capped at 16.66%
- Senior secured notes held by affiliates of Starboard Value LP (“Starboard”) and a foreign secured term note, each to be retired in full
- Shareholder vote expected to be held in first quarter of 2021
Business Highlights
- Charter and Comcast providing long-term data rights to help accelerate the path to more accurate measurement for brands, agencies and media sellers in a privacy-friendly manner
- Local markets will have an unprecedented amount of data for media measurement
- Smaller and independent networks will have access to better viewership measurement
In connection with the Investment, the Company’s convertible debt held by Starboard and the Company’s secured term note each will be repaid in full at the closing of the transaction. Starboard will receive $204.0 million in cash from Investment proceeds, plus accrued interest and 3.15 million common shares. The Investment transaction will require shareholder approval and is subject to customary closing conditions.
As part of the transaction, the Company will enter into an extended data license agreement with Charter, anchoring and expanding the Company’s comprehensive, industry-leading assets, and Charter will treat Comscore as its preferred local measurement partner. In concert with Charter, Comscore plans to drive a new industry standard in media measurement towards impressions-based measurement for the selling and buying of advertising.
Cerberus, through its industry leading technology solutions platform (“CTS”), deploys world-class capabilities in new-form technologies, advanced data and analytics, and programmatic ads and media optimization. CTS’s operating executives bring decades of experience in building and managing data consortia, optimizing and enriching proprietary data assets, and innovating and implementing data driven decisioning solutions.
“This is a watershed moment in our history,” said Bill Livek, Chief Executive Officer, Comscore. “The retirement of debt provides the company with the financial flexibility to execute our plan. The investment and commercial agreements we announced today will supercharge our ability to deliver trusted cross-platform measurement for all customers. We are built to deliver now.”
“The time has finally come for Comscore, with its industry-leading impression-based data sets, to be able to offer advertisers, agencies and inventory owners the kind of granular measurement, attribution and reporting they will need to compete in our high-tech world. As people continue to consume content in different ways and on multiple platforms, our investment in Comscore will further enhance the television industry and Spectrum Reach’s ability to provide marketers and advertisers with effective and measurable data-driven solutions,” said David Kline, Executive Vice President, Charter and President, Spectrum Reach. “More effective audience measurement will help clients to better reach targeted audiences throughout the communities we serve and ensure a greater return on their advertising investment.”
Matt Zames, President of Cerberus, added, “We look forward to partnering with the Comscore management team, Charter and Qurate to build on Comscore’s next phase of transformation and growth. With Comscore’s leading data and analytics capabilities, we are excited to apply our expertise and resources to help build on its portfolio of trusted products and drive value for shareholders.”
Further Detail on Agreements
Charter, Qurate and Cerberus each will receive approximately 27.5 million shares of convertible preferred stock, with each investor’s voting rights capped at 16.66% (on an as-converted basis). The investors will be entitled to an annual cash dividend of 7.5% on their respective Investment amounts and can request a one-time dividend recapitalization transaction after January 1, 2022 of up to 3.0x LTM Adjusted EBITDA, as defined in the transaction documents.
Ownership Structure and Leadership
Upon closing, Comscore will continue to operate as a standalone public company. Each of Charter, Qurate and Cerberus will have the right to designate two seats on the Company’s board of directors, which will be expanded to a total of ten members, subject to applicable independence and qualification requirements.
Advisors
Goldman Sachs & Co. LLC and Evercore served as financial advisors and Vinson & Elkins LLP served as legal counsel to Comscore throughout the process.
Kirkland & Ellis LLP served as legal counsel to Charter, Baker Botts LLP served as legal counsel to Qurate, and Davis Polk & Wardwell LLP served as legal counsel to Cerberus.
