Nielsen IPO produces big payoff for executives


The success of the IPO of Nielsen Holdings, the parent company of The Nielsen Company, is good news for the company’s top executives. They already held stock and options – and now they know what they’re worth.

As you would expect, CEO David Calhoun has the biggest personal holding in the company of Nielsen’s top management. He’s pictured ringing the opening bell at the NYSE on Wednesday as “NLSN” began trading, accompanied by other executives and directors of the company, plus some exchange officials. At the closing bell a few hours later Nielsen’s newly minted public stock was at $25 per share – a $2 gain from its IPO pricing the previous evening.

Calhoun owns directly 965,909 shares of Nielsen stock and has an additional 284,090 in a trust for his family. That’s a total of 1,249,999 worth over $31.2 million at the $25 per share price. Calhoun also has 3,393,750 in-the-money options, most of which are already vested, carrying an exercise price of $16. Subtract $16 from $25 and they’re worth an additional $30.5 million. An additional 156,250 options with an $18.40 exercise price will vest in three equal installments beginning in March 2011. Mostly vested but out-of-the money are options to buy 565,625 shares at $32 each.

Also a multi-millionaire from the IPO is Nielsen Vice Chairperson Susan Whiting, who has long headed the lucrative TV ratings business. The 112,089 shares she owns directly are worth over $2.8 million at the $25 price. Whiting also has mostly-vested options at $16 – 509,062 of them, adding an additional $4.6 million to her net worth. In addition, she has 84,844 mostly-vested but out-of-the-money options at $32.

CFO Brian West directly owns 78,125 Nielsen shares worth a little shy of $2 million at the $25 price. He also has 424,218 of the $16 options, mostly vested, worth over $3.8 million. He also has some of the $18.40 options, 6,250 of them, which vest on the same schedule as Calhoun’s. West has 70,704 of the mostly-vested, out-of-the-money options at $32.

The big payoff, of course, goes to the private equity firms who took the former VNU private in a 2006 leveraged buyout (LBO) for $9.7 billion. One radio trade publication reported incorrectly on Thursday that the PE firms are cashing out $1.6 billion from the IPO. The proceeds – actually more than $1.8 billion after offering costs – are all going to pay down debt (except for $7 million to settle some intracompany loans). But the big payoff for the PE firms is in the value of the huge pile of now-public Nielsen stock that they hold.

AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co and Thomas H. Lee Partners were the original PE sponsors of the LBO, with Centerview Partners as a subsequent investor.

Collectively the PE firms operate as Valcon Acquisition Holding, a Luxembourg corporation. Valcon owns a whopping 270,746,445 Nielsen shares. Multiply that by $25 and they are now holding stock worth $6.77 billion.

RBR-TVBR observation: Pretty impressive for the first media-related IPO coming out of a long recession. It looks like the IPO will knock about $2 billion off the current $8.6 billion of debt. The market cap is about $8.8 billion, putting the total enterprise value at around $15.4 billion, so not a bad return from the LBO.

Reference RBR-TVBR coverage:
Nielsen is a Wall Street star in IPO pricing

Nielsen soars in Wall Street debut