ComScore and Rentrak To Merge In Run To Rival Nielsen In Measurement

“Rentrak’s biggest challenge is that they don’t have the core television data, which you need as you move to total audience”, Clarizio said, adding of the viewr panels that form the core of Nielsen’s business, “And they don’t have the panels that we do”.

Wall Street appeared very enthusiastic about the plan, with Rentrak shares surging 13 percent after the closing bell while ComScore shares jumped 7 percent.

Rentrak had a market value of $666 million at Tuesday’s close; comScore’s market value was $1.6 billion.

The boards of directors of both companies have already approved the merger, and once the companies are combined Rentrak will have four board seats to ComScore’s eight.

On a conference call with analysts to discuss the deal, Rentrak vice chairman and CEO Bill Livek, who will remain with the combined company as executive vice chairman and president, said the merger is a next logical step toward cross platform measurement. The combination could give rise to a strong competitor to Nielsen, which has always been the dominant company providing audience measurement to media companies and the advertisers who support them. Each Rentrak share will be converted into a right to receive 1.15 shares of comScore, which will leave comScore shareholders with about two-thirds of the combined company. Rentrak has a market capitalization of $665.9 million.

“Together we have an even more powerful ability to deliver what our clients and the media industry have always been asking for: a comprehensive cross-platform measurement currency that accounts for all the ways in which content is consumed, whether that happens on a desktop, mobile device, live or time-shifted TV, video on demand or through over-the-top devices”, Matta said in the announcement for the merger.

ComScore, which specializes in digital measurement, will join forces with Rentrak, which tracks set-top box data to measure television viewing.

This time it’s Portland-based Rentrak Corp., which monitors movie box-office results and online video viewership.

Still, that hasn’t stopped media owners such as Viacom Inc., owner of MTV and Nickelodeon, from attacking the measurement giant and blaming its channels’ ratings declines partly on antiquated measurement methods.

comScore expects the transaction to be mildly dilutive to its Non-GAAP EPS in 2016, and accretive in 2017.

When WPP revealed its original investment in comScore, there were questions about non-WPP agencies’ sentiments toward the deal.

J.P. Morgan Securities LLC advised ComScore and Goldman Sachs & Co advised Rentrak.