A Nielsen IPO Would Be First Big Test of Media Economy Health

Nielsen’s private equity backers are auditioning bankers to help the company conduct a long-rumored initial public offering.

An IPO would be the first major test of how investors are feeling about the media economy in some time. It’s also the biggest financial news since Comcast swooped in on NBC Universal late last year.

The news was first reported by the Financial Times. My sources say Nielsen’s owners — Alpinvest, the Blackstone Group, the Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts and THL Partners — hope to make the offering in the third quarter of 2010. They believe the economy may be sufficiently strong to elicit investor interest by the end of this year.

The Financial Times reports that the private equity owners hope to realize an enterprise value of $21 billion for Nielsen, or 11 to 13 times earnings before interest, tax, depreciation and amortization.

Nielsen Co. CEO is former General Electric top executive David Calhoun, and his right-hand woman is Susan Whiting, vice chairman and executive vice president.

The demand for shares in the measurement service could be hard for the market to quantify since Nielsen, as few tire pointing out, has something of a monopoly in TV ratings and there’s little to compare it to. There’s a little more competition in the Internet field thanks to comScore, and precious little when it comes to mobile, which is taking off as a marketing medium.

The growth of mobile and online video are two reasons why media companies, marketers and agencies have formed their own task force, the Coalition for Innovative Media Measurement, to get TV, Internet and mobile measurement evolving at a much faster pace. (Click here for my interview with CIMM Managing Director Jane Clarke.) The group has been described as a Nielsen rival, but CIMM members repeat often that it is not their intention to replace the New York-based data giant.

The group also wants to co-fund development of set-top-box data on offer to the market. And that much sought after data belongs to the cable operators who have yet to monetize it. Those MSOs and Nielsen rivals, such as Rentrak and TiVo, will no doubt be watching this IPO unfold with interest.

Given that Blackstone also owns stakes in The Weather Channel, one wonders if this IPO could augur changes in their holdings elsewhere.