Leading French advertising agency Publicis Groupe SA has agreed to pay $3.7 billion for Sapient Corp. (SAPE) , returning to the U.S. to boost its presence in the fast-growing digital and interactive advertising market months after failing to tie up a deal with Omnicom Group Inc.
Publicis said on Monday, Nov. 3, that it will offer $25 per share for Boston, Mass.-based Sapient, a 44% premium to the target's Friday closing price.
"Sapient is a crown jewel, a one of a kind company born in the technology space with strengths in marketing, communications, consulting and omni-channel commerce, all of which are equally important to best help clients achieve " said Publicis Chairman and CEO Maurice Lévy in a statement, adding that Sapient will give it access to new markets and revenue streams.
Buying Sapient will add €1.1 billion of revenue to Publicis' existing sales of €6.96 billion and boost Ebitda by €137 million, or 11%, the Paris-based company said. Sapient's sales grew just over 14% in the past twelve months compared with a revenue increase of 1.2% for Publicis. The acquisition will boost Publicis' total earnings from digital advertising and commerce to over 50% of the total by next year, three years ahead of a plan to hit that target.
The agreed bid arrives six months after the collapse of Publicis' $36 billion merger with Omnicom Group Inc. to create the world's largest advertising agency. That deal fell apart because of clashing corporate cultures and Publicis' perception that Omnicom saw the merger as a takeover rather than a combination of equals.