MCGRAW-HILL BUYS J.D. POWER FAMED RESEARCH FIRM TO JOIN PUBLISHING EMPIRE.

Byline: Gregory J. Wilcox Staff Writer

WESTLAKE VILLAGE - J.D. Power and Associates, the market research company that's chronicled customer satisfaction for nearly 40 years, is being sold to McGraw-Hill Cos., whose holdings include textbook publishing and BusinessWeek magazine, the firms said Monday.

Little change is expected at J.D. Power, which is based in Westlake Village and has 787 employees and 12 offices worldwide. The name will survive the purchase, with Power now being identified as a McGraw Hill company.

Company founder J.D. Power III will remain active in directing the company, and President Stephen Goodall will continue to oversee day-to-day operations, an official with McGraw Hill said.

Terms were not disclosed. But, when the 37-year-old company went on the market in October, several estimates valued a potential deal up to $400 million. New York-based McGraw Hill, whose brands also include Standard & Poors, was among those named as a likely buyer.

Power said he began talking to McGraw-Hill executives more than a year ago, well before retaining an investment banking firm to explore strategic options.

``Every time we looked at a combination, McGraw-Hill ended up at the top of the heap in terms of values,'' Power said, adding that the key values being considered were integrity, independence and objectivity.

McGraw-Hill reportedly wants to grow the franchise, which is best known for its Power Information Network LLC ratings of customer satisfaction for a variety of products from cell phones to automobiles.

``That's why I'm staying active in the business,'' said Power, 73. ``We see the opportunity to grow faster.''

Power will become part of McGraw-Hill's Information and Media Services business. In addition to BusinessWeek, McGraw-Hill's operations include McGraw-Hill Construction, energy publication Platts and industry newsweekly Aviation Week.

``J.D. Power and Associates is an excellent fit with the McGraw-Hill Companies, and will enhance our growth prospects for our business information platforms,'' Harold McGraw III, the companies' chairman, president and chief executive officer, said in a statement.

McGraw noted that the companies have been keen on providing independent industry ratings and benchmarks that ``help businesses and consumers make effective decisions.''

Privately held Power is not required to release financials. But business tracker Hoover's points to it being on a growth path.

It estimated that Power had 2003 revenues of $144.8 million and had projected sales to jump 9.6 percent last year. And, in 2003, the company had 202 fewer workers than now.

That suggests to Edward J. Atorino, an analyst at Fulcrum Global Partners LLC in New York, that Power could have sales of $150 million this year. But it is a relatively small deal, considering McGraw-Hill has sales of $5.3 billion last year.

``It's sort of a tuck-in acquisition, a good little company that will help them,'' he said of the deal.

Neil Godsey, an analyst at ThinkEquity Partners in San Francisco, said it's a good fit for both companies.

``I think McGraw-Hill is adding a strong brand name to its portfolio of already strong brand names,'' he said.

McGraw-Hill's stock closed Monday at $95.40, down 51 cents.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

J.D. POWER AND ASSOCIATES

HQ: Westlake Village

Founded: 1968

Employees: 787

What it is: J.D. Power surveys are conducted for a number of consumer products, but its annual reports on automobile customer satisfaction are its most noted product.

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J.D. POWER AND ASSOCIATES (see text)