SAN FRANCISCO/CHICAGO: US private equity investment firm Thoma Bravo announced it has reached an agreement to acquire J.D. Power, a global leader in data analytics and consumer intelligence, resulting in its return to US control.
XIO Group, backed by investors from China, is the seller.
The transaction is expected to close by year end.
Upon closing, Thoma Bravo plans to partner with J.D. Power's existing team in the ongoing expansion of the company, with a focus on continued development of enhanced industry insights, advanced analytics and innovative new offerings.
As part of the transaction J.D. Power's existing management team and employee owners will be rolling over their ownership interest in the company.
"We are thrilled to partner with Thoma Bravo, a firm that clearly understands our space and is well-positioned to help us develop new growth opportunities and continue on our current path of rapid expansion," said J.D. Power president and CEO Dave Habiger.
"This is an exciting step forward for our company, and we look forward to a fruitful partnership that will help us maximise our company's fullest potential."
Thoma Bravo, armed with over US$30 billion in funds, focuses on investments in the software and technology-enabled services sectors.
Reuters reported in May that XIO was exploring a sale of the US customer survey and car ratings company that could value it at close to US$1.9 billion, including debt.
The report cited people familiar with the matter.
XIO’s acquisition of J.D. Power in 2016 attracted US government scrutiny because the buyout firm has investors from China. XIO has decided the time has come to sell the company so it can score a profit on its investment, according to the sources.
XIO has hired investment bank Evercore Partners Inc to run a sale process for J.D. Power, which has 12-month earnings before interest, taxes, depreciation and amortisation of about US$135 million, the sources said.
Based in Costa Mesa, California, J.D Power provides consumer insights, advisory services and data and analytics to companies.
J.D. “Dave” Power and his wife Julie started the eponymous company in 1968 from their home in Calabasas, California, and landed Toyota Motor Corp as their first client.
While J.D. Power’s roots are in car research, it also conducts annual customer satisfaction surveys on industries, from credit cards to hotel loyalty programs and cable companies, that are often cited in advertisements and commercials.
S&P Global bought J.D. Power in 2005 for an undisclosed sum before selling it to XIO for US$1.1 billion in 2016. In the last three years, XIO has recouped from J.D. Power through dividends about a third of the US$1.1 billion purchase price, one of the sources told Reuters.
