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Nielsen (NLSN) Rallies 30.5% on Its Acquisition Announcement

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Nielsen Holdings stock surged 30.5% after the U.S. market closed on Monday following the news posted by The Wall Street Journal that a consortium of private equity groups including Elliott Management is in talks to buy the former.

It is to be noted that Elliott has a 4.6% stake in Nielsen. Also, it is among the top 10 shareholders, according to Refinitiv data.

Per the report, financing talks with several banks have been taking place to complete the acquisition for $15 billion including debt. The deal might get completed within weeks, although there is no surety.

The company had a market volume of $6.2 billion on Monday. Its enterprise value was more than $11 billion owing to a hefty debt of more than $5 billion.

It is worth mentioning that the company is yet to confirm any potential deal.

Factors to Consider

Nielsen is a leading global information and audience measurement company that offers information and analysis about consumers and consumer behavior to organizations. Further, it holds a dominant position in the U.S. television market.

As new technologies enable video viewing online, both content providers and advertisers look for a known and trusted source to compare performance and reach. Since they have traditionally relied on Nielsen for TV, it positions the company very strongly to cater to this trend.

Yet, growing technological developments in the media industry including set-top boxes, Internet TV, scan-based retail data and e-Commerce provide an alternative means to measure TV viewing habits. Further, the growing adoption of streaming video services has been limiting Nielsen’s efforts in measuring ratings.

Nevertheless, NLSN is aggressively working on a cross-platform measurement solution called Nielsen ONE. Additionally, the company recently announced an enhancement to Nielsen ONE with Nielsen ONE Alpha deduplicate ad measurement, which remains a positive.

Further, the company is gaining momentum among customers on the back of Impact Marketing Solutions. The improving Sports business is contributing well to Impact revenues. Additionally, the recent announcement to provide Nielsen Impact Score solution to collegiate football teams for expanding its presence to different universities remains a notable step.

Zacks Rank & Other Stocks to Consider

Currently, Nielsen carries a Zacks Rank #1 (Strong Buy).

Investors interested in the business services sector can also consider stocks like Concentrix (CNXC - Free Report) , The Hackett Group (HCKT - Free Report) and WNS (WNS - Free Report) . While Concentrix sports a Zacks Rank #1, The Hackett Group and WNS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Concentrix has gained 35.1% in the past year. The long-term earnings growth rate for the stock is currently projected at 15.6%.

The Hackett Group has gained 22.2% in the past year. The long-term earnings growth rate for the stock is currently projected at 15.5%.

WNS has gained 8.4% in the past year. The long-term earnings growth rate for the stock is currently projected at 15.2%.

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