NIQ Global IPO weighed down by debt load
NIQ Global Intelligence, the consumer intelligence firm that was formerly part of Nielsen, has successfully returned to the public markets with the pricing late on Tuesday of a US$1.05bn NYSE IPO.
JP Morgan, Bank of America, UBS, Barclays and RBC Capital Markets priced 50m shares at US$21, in the lower half of the US$20–$24 marketing range. The banks had communicated the potential pricing at the midpoint of the marketing range.
“They are growing slowly, have structurally lower margins, a fair amount of debt, and there is a PE overhang,” said one buysider. “It’s not terribly exciting but should work if they are able to execute for a couple of quarters.”
The banks were seven times oversubscribed on the final pricing terms, with the top 25 institutional investors participating allocated 70% of the offering, skewed to long-only, anchor type investors at the top of the book, a banker involved in the offering told IFR.
NIQ shares fell 5% on their market debut to US$19.01 on Wednesday and were still below the strike price on Friday afternoon at US$19.40.
As a former leveraged buyout, NIQ checks a lot of boxes of a leveraged company whose value is partially predicated on repaying debt. It is also significant to reviving sponsor-backed dealflow.
NIQ is using the money to fully repay the US$513.9m drawn on a revolving credit facility and US$400m on a term loan, reducing its net debt load to US$3bn, or 3.9 times adjusted Ebitda.
Advent International did not sell in the deal though it is contributing 7.5m shares to the greenshoe, which if exercised would reduce its stake to 52.5%. After acquiring the business for US$3bn in 2021, Advent's stake was diluted through the purchase of Germany’s GfK from KKR (10.3%) in 2023.
This is a durable business and has become more profitable under Advent’s watch. In the 12 months ended March 31, NIQ generated adjusted Ebitda of US$740.7m on revenues of US$4bn. That compares with US$425m and US$2.8bn in 2022, the first full year under Advent’s ownership.
NIQ has invested roughly US$400m in AI technologies to enhance and automate the analysis of consumer buying behaviour, culminating in the launch last year of its cloud-based software platform.
As can be the case with any LBO, unlocking value for shareholders is achieved by repaying debt. NIQ lost US$227.1m on a free cashflow basis in the 12 months ended March 31 after netting out capex spent on AI and interest expense to service debt.
Including debt, NIQ is going public at an enterprise value of US$9.5bn, valuing it at 12.3 times trailing Ebitda. That narrows to a roughly eight multiple of 2026 Ebitda projected by investment banks, versus the 12.7 multiple consumer credit bureau Transunion currently trades at, according to LSEG data.
“When it comes to leverage-backed IPOs, there is not a lot of disparity among investors on valuation,” said a second buysider. “It is good to see [leveraged-backed IPOs] back in the market for the first time in years.”