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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1999
NETRATINGS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 000-27907 77-0461990
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(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification No.)
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830 Hillview Court, Suite 225
Milpitas, California 95035
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (408) 957-0699
(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(a) This current report on Form 8-K relates to the acquisition of
control of NetRatings, Inc. by Nielsen Media Research, Inc., a Delaware
corporation ("NMR"). NMR is a wholly-owned subsidiary of VNU USA, Inc. ("VNU
USA"), which in turn is a wholly-owned subsidiary of VNU N.V., a
Netherlands corporation ("VNU").
Prior to the transactions reported hereby, NMR was the holder of
1,644,377 shares of NetRatings common stock and warrants to purchase an
aggregate of 6,553,054 shares of NetRatings common stock at a weighted
average exercise price of approximately $9.95 (the "Warrants"). The Warrants
are filed herewith as Exhibits 1 and 2. Pursuant to a Second Restated Rights
Agreement dated September 22, 1999, which is filed herewith as Exhibit 3, NMR
had the right (the "Top-Off Right") to purchase a number of additional
shares of NetRatings common stock concurrently with NetRatings' initial
public offering ("IPO"), at the IPO price, such that NMR would own 54% of the
common stock of NetRatings that is outstanding or issuable upon the exercise
of all outstanding options and warrants (including the Warrants). Under this
agreement, NMR was obligated to purchase shares offered by other NetRatings
stockholders before purchasing new shares issued by NetRatings. On November
9, 1999, NetRatings and NMR entered into an additional agreement (the
"November 1999 Agreement") pursuant to which NMR agreed to exercise the
Warrants and the Top-Off Right, upon the later to occur of (i) the closing of
the IPO or (ii) the expiration or early termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Waiting Period"). Also pursuant to the November 1999 Agreement,
NetRatings agreed, effective upon NMR's exercise of the Top-Off Right and the
Warrants, to increase the size of its board of directors to 11 and to elect
five additional NMR nominees, such that its board would consist of a total of
six NMR nominees. A copy of the November 1999 Agreement is filed herewith as
Exhibit 4.
The IPO closed on December 13, 1999, and the HSR Waiting Period expired
on December 19, 1999. Accordingly, on December 22, 1999, NMR exercised the
Top-Off Right by purchasing a total of 10,635,295 shares of NetRatings common
stock, including 595,555 purchased from other NetRatings stockholders, at a
purchase price of $17.00 per share, and exercised the Warrants in full. In
the aggregate, NMR purchased 17,188,349 shares of NetRatings common stock in
these transactions for a total purchase price of approximately $246 million,
of which approximately $236 million represented proceeds to NetRatings and
the remainder was paid to other NetRatings stockholders. As a result of these
transactions, NMR became the beneficial owner of 18,832,727 shares of common
stock of NetRatings, or approximately 58.7% of NetRatings' outstanding common
stock.
Pursuant to the November 1999 Agreement, on December 20, 1999, the
NetRatings board of directors increased the size of the board to 11 members
and elected John A. Dimling, Thomas A. Mastrelli, Gerald S. Hobbs, Daniel
O'Shea and Charles E. Leonard as directors, effective as of the time when the
Top-Off Right and the Warrants were exercised. These persons join David H.
Harkness as the six NMR nominees on the NetRatings board.
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VNU and an affiliate of VNU advanced the funds used by NMR to fund its
purchase of common stock in the foregoing transactions. VNU and its affiliate
borrowed these funds under a Revolving Credit Facility Agreement dated as of
August 15, 1999 with ABN-Amro Bank ("ABN") and Merrill Lynch International as
arrangers, ABN as agent and several other banks from time to time parties
thereto.
NetRatings' press release of December 22, 1999 disclosing the foregoing
transactions is filed herewith as Exhibit 5.
(b) Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed with this report:
Exhibit No. Title
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1.* Common Stock Purchase Warrant issued to NMR, expiring
December 31, 2001.
2.** Common Stock Purchase Warrant issued to NMR, expiring December
31, 2004.
3.*** Second Restated Rights Agreement.
4.**** Agreement between NetRatings and NMR dated November 9, 1999.
5. Press Release dated December 22, 1999.
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* Incorporated by reference to Exhibit 10.10 to NetRatings'
Registration Statement on Form S-1 (No. 333-87717) (the "Registration
Statement").
** Incorporated by reference to Exhibit 10.11 to the Registration Statement.
*** Incorporated by reference to Exhibit 4.1 to the Registration Statement.
**** Incorporated by reference to Exhibit 4.4 to the Registration Statement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
NetRatings has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETRATINGS, INC.
Date: January 4, 2000 By: /s/ Jack R. Lazar
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Jack R. Lazar
Vice President, Chief Financial Officer
and Secretary
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EXHIBIT INDEX
EXHIBIT NO. TITLE
1.* Common Stock Purchase Warrant issued to NMR, expiring
December 31, 2001.
2.** Common Stock Purchase Warrant issued to NMR, expiring
December 31, 2004.
3.*** Second Restated Rights Agreement.
4.**** Agreement between NetRatings and NMR dated November 9, 1999.
5. Press Release dated December 22, 1999.
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* Incorporated by reference to Exhibit 10.10 to NetRatings'
Registration Statement on Form S-1 (No. 333-87717) (the "Registration
Statement").
** Incorporated by reference to Exhibit 10.11 to the Registration Statement.
*** Incorporated by reference to Exhibit 4.1 to the Registration Statement.
**** Incorporated by reference to Exhibit 4.4 to the Registration Statement.
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EXHIBIT 5
For Immediate Release
Contacts:
Nielsen Media Research: Jack Loftus 212-708-7724
VNU USA: Georgina Challis 212- 536-5199
NetRatings: Jack Lazar, CFO 408-941-2958
NIELSEN MEDIA RESEARCH COMPLETES ITS STRATEGIC
INVESTMENT IN NETRATINGS, INC.
NEW YORK, DECEMBER 21, 1999 - NetRatings, Inc. (NASDAQ: NTRT) and Nielsen Media
Research, Inc. today announced that the parties have completed a strategic
investment in which Nielsen Media Research purchased shares of NetRatings common
stock through a private placement and exercised its existing warrants to
purchase shares. As a result of the transaction, NetRatings received cash
proceeds of approximately $236 million. The terms of the private placement and
warrant exercise were set forth in NetRatings' filings with the Securities and
Exchange Commission related to its recently completed initial public offering.
The investment was carried out under an agreement between the two companies,
which was reviewed by the U.S. Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
In March 1999, the two companies launched the Nielsen//NetRatings Internet
audience measurement service. The Nielsen//NetRatings service is used by more
than 170 customers in North America and is scheduled to be introduced in twelve
countries during the year 2000. NetRatings, Inc. headquartered in Milpitas,
California, completed its initial public offering on December 8, 1999. Nielsen
Media Research, headquartered in New York, New York is a subsidiary of VNU USA,
Inc., which is a division of Netherlands-based VNU, one of the world's leading
publishing and information companies.
Pursuant to an agreement between Nielsen Media Research and NetRatings as
detailed in the NetRatings, Inc. public filings with the Securities and Exchange
Commission, Nielsen Media Research exercised warrants and purchased stock from
NetRatings and several of its shareholders, bringing its ownership position to
54 percent. Prior to this investment, Nielsen Media Research had a minority
interest in NetRatings, Inc.
Concurrent with the closing of this transaction, the NetRatings Board of
Directors was expanded to 11 members. Joining the NetRatings board are:
- John A. Dimling: President and CEO of Nielsen Media Research,
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- Gerald S. Hobbs: Chairman and CEO of VNU, USA, Inc.,
- Charles E. Leonard: President of VNU Marketing Information, Inc.,
- Thomas A. Mastrelli: Chief Operating Officer (COO) of VNU USA,
- Daniel O'Shea: COO of VNU Marketing Information Inc.
Continuing to serve on the NetRatings, Inc. board are:
- David A. Norman (Chairman): Private Investor,
- David J. Toth: President and CEO, NetRatings, Inc.,
- Michael P. Connors: Vice Chairman of ACNielsen,
- James J. Geddes, Jr.: Managing Director of Trans Cosmos U.S.A. Inc.,
- David H. Harkness: Senior Vice President - Planning and Development
for Nielsen Media Research,
- Jack T. Serfass: Co-founder and co-chairman of Bowstreet Software, Inc.
About NetRatings, Inc.
NetRatings provides Internet audience measurement information and analysis. The
Company's products and services enable its customers to make informed
business-critical decisions regarding their Internet strategies. NetRatings
delivers accurate and timely Internet audience information, collected from a
representative sample of Internet users, and augments this information with
detailed, flexible reporting and in-depth analysis. NetRatings has formed
strategic relationships with Nielsen Media Research, the leading source of
television audience measurement and related services in the United States and
Canada, and ACNielsen (NYSE: ART), a leading provider of market research
information and analysis to the consumer products and services industries.
NetRatings' proprietary activity tracking and data collection technology gathers
comprehensive and detailed information regarding Internet user behavior,
including both site and advertising activity. For more information regarding
NetRatings please visit www.netratings.com.
About Nielsen Media Research
Nielsen Media Research is the leading provider of television audience
measurement and related services in the United States and Canada. Its National
People Meter Service provides audience estimates for all national program
sources, including broadcast networks, cable networks, Spanish language
television, and national syndicators. Local ratings services estimate audiences
for each of the 210 television markets in the U.S., including electronic metered
service in 47 markets. Nielsen Media Research also provides competitive
advertising intelligence information through Nielsen Monitor-Plus, and Internet
usage and advertising information through Nielsen//NetRatings. Nielsen Media
Research is a subsidiary of VNU USA, which is a division of Netherlands-based
VNU, one of the world's leading
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publishing and information companies. Additional information is available at:
www.nielsenmedia.com.
About VNU
VNU is one of the world's leading publishing and information companies and has
leading market positions in consumer magazines, directories and information
services, business information, as well as educational publishing. Worldwide,
VNU employs approximately 15,000 people and has annual revenues of more than
$2.8 billion.
Forward-Looking Statements:
This press release contains forward-looking statements regarding the expansion
of the Nielsen//NetRatings service during the year 2000. These statements are
based on current expectations and assumptions and involve a number of
uncertainties and risks that could cause actual results to differ materially
from those currently expected, including risks associated with the rapidly
evolving market for the Company's products and services and uncertainties
regarding the development of those markets; the Company's dependence on
A.C.Nielsen in connection with the Company's planned international expansion;
and risks associated with international operations. For additional information
regarding these and other risks, reference is made to NetRating's registration
statement on Form S-1 filed with the Securities and Exchange Commission in
connection its recently-completed initial public offering.
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