Publicis has bought US consultancy group Sapient, as the France-based global ad giant looks to expand into the US and moves on from its failed merger with Omnicom.
The deal, which is described as a merger, will see Sapient become a wholly-owned subsidiary of Publicis Groupe.
Publicis is paying $25.00 per share in an all-cash transaction at a total valuation that is a 44% premium to Nasdaq-listed Sapient’s most recent share price, as of October 31.
Both companies’ boards have approved the offer and Sapient Chief Executive Officer and Co-Chairman Alan J. Herrick will become CEO of Publicis.Sapient. Publicis’ shares fell 3.3 percent to 53.44 euros in Paris at 9:12 a.m.
Publicis is moving on from the $35 billion merger with Omnicom, which was abandoned in May after executives clashed over how to run the combined entity.
The owner of agencies including Saatchi & Saatchi and Leo Burnett said Sapient will help it reach a target of generating half of its revenue from digital offers three years ahead of plan.
“We’ve been investing for many years in digital capabilities for one simple reason: it’s the future,” Publicis CEO Maurice Levy, 72, said on a conference call from New York. “The pace of innovation is accelerating faster than ever. These mean big challenges for our clients.”
Publicis plans to finance the purchase with cash and borrowings, without selling shares. The company received a firm financing commitment from Citigroup.
The transaction, which will generated annual cost synergies of 50 million euros, is expected to be completed in the first quarter of 2015.
Watch this video from Bloomberg anlysing the deal here: