Nielsen Holdings is expected to go public tomorrow, less than five years after being acquired by six private equity firms for approximately $10 billion. The TV and consumer measurement company hopes to raise more than $1.5 billion, and the entire private equity market hopes that a successful showing could kick open the doors to other debt-laden companies acquired for big dollars during last decade’s buyout boom.
I’m obviously not counting Nielsen’s chickens before they hatch, but let’s assume that Nielsen prices within its stated range ($20-$22 per share), experiences at least a modest first-day pop and trends up in the after-market. Who’s next?
That was the question raised in a brief report today from S&P Leveraged Commentary & Data, which looked at the ten largest companies taken private in 2006 and 2007. More specifically, it ranked the contenders based on their changes in EBITDA between 2007 and 2010, plus their ability to lower debt-loads over the same period.
Nielsen had the best EBITDA increase at 37.6%, and obviously will be first out of the gate. Next up is medical device maker Biomet, which posted a 30.1% EBITDA increase and lowered leverage more than a turn from 9x in 2007 to 6.53x in 2010. Next up is hospital operator HCA — 26% EBITDA increase, debt lowered from 6.23x to 4.83x — which filed for a $4.6 billion IPO last month but has yet to move forward.
“Bubble” companies are Aramark and Univision.
The least likely of the group is Energy Future Holdings (f.k.a. TXU), which was acquired for $48 billion in 2006 when it was still known as TXU. The Texan utility’s leveraged loans are trading in the low 80s, compared to 90+ for all other companies on the list. Also unlikely to go public any time soon are First Data, Freescale, Realogy and Harrah’s (which already tried, and failed).
Update: Nielsen priced its IPO above its offering range. It will begin trading today under ticker symbol NLSN.