May 22, 2019 / 4:00 PM / 24 days ago

Vista Equity Partners lines up binding bid for Kantar - sources

LONDON, May 22 (Reuters) - Private equity fund Vista Equity Partners has emerged as one of four U.S. bidders vying for a majority stake in WPP's data analytics firm Kantar, two sources close to the deal told Reuters.

The world's biggest advertising company and its adviser Goldman Sachs are hoping to wrap up the process in late June and have given Vista access to Kantar's books to carry out due diligence checks, the sources said.

Vista, whose private-equity portfolio comprises of mostly software companies, bought U.S. technology firm Apptio last year in a $1.94 billion cash deal.

Apptio provides cloud-based and hybrid business management software and its technology may fit well with Kantar, which specialises in brand and marketing communications research for some of the world's largest advertisers.

However, one of the sources said Vista is looking to invest directly in Kantar and synergies with its portfolio companies would only be extracted at a later stage.

WPP declined to comment while Vista was not immediately available for comment.

Reuters reported on May 16 that Bain Capital, Apollo and Platinum had also been admitted to the final stages of the auction and were vying to secure control of Kantar.

Kantar is valued at about 3.5 billion pounds ($4.43 billion) and generates about 15% of WPP's overall sales. Its underlying sales slipped 2 percent last year to 2.6 billion pounds with operating profits down 14 percent to 301 million pounds.

The business has traditionally weighed on WPP's overall organic growth rates, a key measurement for the industry.

Kantar risks losing market share to more tech-savvy peers, while its business model is challenged by consumer-goods companies developing their own data teams, rather than relying on surveys undertaken by external firms.

WPP's new boss Mark Read, who took the helm of the 12-billion pound advertising giant in September, has pledged to spend 300 million pounds restructuring the group to bring it back in line with peers by the end of 2021.

In March he said the firm was at the start of a "three-year turnaround plan" but cautioned that 2019 would be challenging due to client losses from last year.

Read is expected to use the proceeds from the sale of Kantar sale to help steer WPP back to growth.

$1 = 0.7899 pounds Reporting By Pamela Barbaglia; Editing by Kirsten Donovan

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