Power Sold To McGraw-Hill
03-08-2005 | 05:31 PM
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Power Sold To McGraw-Hill
Power Sold To McGraw-Hill - - Source: The Car Connection
Research and consulting firm J.D. Power, best known for its automotive industry quality ratings, is being acquired by McGraw-Hill Cos., publisher of Business Week magazine and parent company of Standard & Poors.
The companies expect to close the deal in April. Terms of the deal were not disclosed.
Founder James David (Dave) Power III will continue to be involved in the running of the firm. President Stephen Goodall will remain in place as well. Dave Power has been looking for a way to get his money out of the firm for some time, as well as a source of funding to expand globally. At one point, he considered a public offering of the Power Information Network, which provides car companies and dealers marketplace information. But that plan didn't fly. Power's son Jamie is also an executive in the company.
Power will become part of MH's Information and Media Services unit, which includes Business Week and a broadcasting operation. Other companies believed to be in the hunt for Power in recent months include VNU, the parent company of Nielsen Marketing Research as well as several publications like Billboard Magazine and Adweek. Power last fall hired Evercore Partners in New York to advise on its future development, including the possibility of a sale.
Power is headquartered in Westlake Village, Calif., has about 780 employees and offices in 12 cities around the world.
McGraw-Hill's diversified holdings have proved to be a good hedge in an uneven economy. The company earned $756 million net last year on $5.25 billion. Its share price closed at $95.41 last Friday, up 31 percent over its 52-week low.
Besides automotive research, Power has successful diversified into research and ratings into cellphones, satellite TV providers, hospitals, HMOs, and more. The firm's rankings are widely thought to be the most influential outside of Consumer Reports. But CR doesn't allow companies to advertise its ratings, whereas Power charges hefty fees to companies for the right to advertise number-one status from its many rankings. Auto companies, for example, pay around $100,000 or more to advertise their Power ranking.
J.D. Power and Associates, headquartered in Westlake Village, Calif., has about 780 employees and offices in 12 cities around the world.
The companies expect to close the deal in April. Terms of the deal were not disclosed.
Founder James David (Dave) Power III will continue to be involved in the running of the firm. President Stephen Goodall will remain in place as well. Dave Power has been looking for a way to get his money out of the firm for some time, as well as a source of funding to expand globally. At one point, he considered a public offering of the Power Information Network, which provides car companies and dealers marketplace information. But that plan didn't fly. Power's son Jamie is also an executive in the company.
Power will become part of MH's Information and Media Services unit, which includes Business Week and a broadcasting operation. Other companies believed to be in the hunt for Power in recent months include VNU, the parent company of Nielsen Marketing Research as well as several publications like Billboard Magazine and Adweek. Power last fall hired Evercore Partners in New York to advise on its future development, including the possibility of a sale.
Power is headquartered in Westlake Village, Calif., has about 780 employees and offices in 12 cities around the world.
McGraw-Hill's diversified holdings have proved to be a good hedge in an uneven economy. The company earned $756 million net last year on $5.25 billion. Its share price closed at $95.41 last Friday, up 31 percent over its 52-week low.
Besides automotive research, Power has successful diversified into research and ratings into cellphones, satellite TV providers, hospitals, HMOs, and more. The firm's rankings are widely thought to be the most influential outside of Consumer Reports. But CR doesn't allow companies to advertise its ratings, whereas Power charges hefty fees to companies for the right to advertise number-one status from its many rankings. Auto companies, for example, pay around $100,000 or more to advertise their Power ranking.
J.D. Power and Associates, headquartered in Westlake Village, Calif., has about 780 employees and offices in 12 cities around the world.
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