Business Context and Reporting Period
This Form 8-K, dated September 29, 2015, reports that comScore, Inc. (comScore) entered into a definitive merger agreement with Rentrak Corporation (Rentrak). Under the agreement, a wholly-owned subsidiary of comScore will merge with and into Rentrak, with Rentrak surviving as a wholly-owned subsidiary of comScore. The transaction is structured as a tax-free reorganization.
Key Financial Metrics and Transaction Terms
The filing details the financial structure of the merger rather than reporting periodic operating results.
- Exchange Ratio: Each share of Rentrak common stock will be converted into the right to receive 1.1500 shares of comScore common stock.
- Fractional Shares: No fractional shares will be issued; holders will receive cash in lieu of fractional shares.
- Termination Fees:
- If comScore terminates under specified circumstances, it must pay Rentrak $57.0 million.
- If Rentrak terminates under specified circumstances, it must pay comScore $28.5 million.
- Support Agreements: comScore officers, directors, and WPP plc (holding approximately 16.8% of comScore stock) have agreed to vote in favor of the merger. Similar support agreements were executed by Rentrak insiders and WPP plc.
Note: This filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for either company.
Material Changes and Governance
Upon consummation of the merger, the comScore Board of Directors will expand to twelve members:
- Eight current comScore directors, including CEO Serge Matta and Executive Chairman Magid Abraham.
- Four directors appointed from the current Rentrak board, including CEO Bill Livek and Chairman Brent Rosenthal.
Post-Merger Leadership:
- CEO: Serge Matta (comScore)
- CFO: Mel Wesley (comScore)
- Executive Chairman: Magid Abraham (comScore)
- Executive Vice Chairman and President: Bill Livek (Rentrak)
Outlook, Risks, and Contingencies
Closing Conditions: The merger is subject to customary conditions, including stockholder approval from both companies, regulatory approvals (including the expiration of Hart-Scott-Rodino waiting periods), and the absence of legal impediments.
Risks and Uncertainties: Management notes that actual results may differ from expectations due to:
- Failure of stockholders to approve the merger.
- Failure to obtain regulatory approval.
- Challenges and costs associated with integration and achieving synergies.
- Retention of key employees, customers, and suppliers.
Future Filings: comScore intends to file a registration statement on Form S-4 and a joint proxy statement/prospectus with the SEC. Investors are urged to read these documents when available.
Key Facts for Investor Verification
- Verify the final approval status of the merger by both comScore and Rentrak stockholders.
- Monitor the status of regulatory approvals, specifically regarding antitrust reviews under the Hart-Scott-Rodino Act.
- Review the upcoming Form S-4 and joint proxy statement/prospectus for detailed financial data and risk factors not included in this 8-K.
- Confirm the final composition of the combined board and executive leadership team post-closing.
- Assess the potential impact of the $57.0 million and $28.5 million termination fees on the balance sheets of both companies should the deal fail.