A buyout for Arbitron?


That's what analyst Jim Boyle at CL King thinks may be coming. With more and more groups signing PPM contracts, Boyle thinks Arbitron could be attractive to private equity funds. "As the de facto radio research monopoly accelerates its revenue growth, revives its historic 30%-plus margins in the coming years in a seemingly reliable fashion, has no debt and mounting cash, we suspect ARB should eventually and logically attract suitors from the many well-funded private equity groups," Boyle said in a research report to clients.

He notes that six of the big private equity groups (PEGs) were involved in deals to buy VNU, Univision, Clear Channel and Ceridian, the latter the former parent company of Arbitron. If you look at those six funds which have an appetite for media and research deals, you see over 370 billion in assets and funds under control. "It seems to us that ARB's 1.6 billion  in market cap should seem the size of a proverbial appetizer to large PEGs," Boyle says. But he also notes, "That might conversely keep ARB low on the radar screen of PEGs looking for much bigger deals."