Reston-based Comscore secures investments for stock deal
Investments from three companies will be used to retire $200M+ in debt, improve liquidity
Reston-based media-measurement and analytics company Comscore Inc. announced Thursday that Connecticut-based Charter Communications Inc., Colorado-based Qurate Retail Inc. and an affiliate of New York-based Cerberus Capital Management LP are each making a cash investment in exchange for shares of convertible preferred stock.
Proceeds from the investment will be used by Comscore to retire existing debt and improve the company’s financial flexibility and liquidity position. The investment includes the issuance of convertible preferred stock of $204 million ($68 million per investor) at $2.47 per share. A competitor of rival analytics and media ratings firm Nielsen Holdings PLC, Comscore has struggled as media consumption habits have rapidly changed. It has also experienced financial challenges.
In a Jan. 7 news release, Comscore stated that telecommunications and mass media company Charter would provide Comscore with “enhanced access” to consumer data and rights. Comscore also stated that the move would assist with the industry’s shift to census-based audience viewership and provide advertisers with more reliable audience measurement and analysis.
“This is a watershed moment in our history,” Comscore CEO Bill Livek said in a statement. “The retirement of debt provides the company with the financial flexibility to execute our plan. The investment and commercial agreements we announced today will supercharge our ability to deliver trusted cross-platform measurement for all customers. We are built to deliver now.”
Comscore has faced numerous challenges in recent years, according to The Wall Street Journal, including executive departures, an accounting scandal and a Securities and Exchange Commission investigation that resulted in Comscore paying a $5 million settlement in 2019.
Since 2019, Comscore’s stock price has plummeted more than 80%; on Thursday, its shares jumped almost 16% to $2.84.
Through the deal’s 10-year license with Charter, Comscore will be able to pursue additional revenue in TV, digital and cross-platform audience and impression-based currency. The deal will also extend Philadelphia-based Comcast Cable Communications LLC’s current data deal with the company.
In connection with the investment, Comscore’s convertible debt held by Starboard Value LP and Comscore’s secured term note will each be repaid in full at the close of the transaction. Starboard will receive $204 million in cash from the investment, plus accrued interest and 3.15 million common shares. The transaction will require shareholder approval and is subject to customary closing conditions.
The transaction includes an extended data license agreement between Comscore and Charter, anchoring and expanding Comscore’s assets, and Charter will treat Comscore as its local measurement partner. In concert with Charter, Comscore plans to drive a new industry standard in media measurement towards impressions-based measurement for the selling and buying of advertising.