Paris, Boston: French advertising and communications conglomerate Publicis Groupe has crashed its way into the technology consulting mainstream with the $3.7 billion acquisition of Boston-based global tech firm Sapient.
The all-cash transaction — of $25 per share — has the approval of both boards and should be completed in early 2015.
- Transformative acquisition establishes Publicis Groupe as a leader in the digital age
- Deal accelerates Publicis Groupe's objective of becoming a leader at the convergence of communication, marketing, commerce and technology
- Will create a platform — Publicis.Sapient — focused exclusively on digital transformation and the dynamics of an always-on world across marketing, omni-channel commerce, consulting and technology
- Publicis Groupe digital revenues will account for more than 50%, three years ahead of 2018 plan
- Publicis Groupe strengthens leadership with Sapient CEO and Co-Chairman Alan Herrick joining Publicis Groupe senior management team (Directoire+) as CEO of Publicis.Sapient
Maurice Lévy, Chairman and CEO of Publicis Groupe, said: "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 their digital transformation. It will also give Publicis Groupe access to new markets and creating new revenue streams. This acquisition fulfills many of Publicis Groupe's objectives: we will enhance our leadership position in digital, achieve our goal of deriving 50% of our revenues from digital and technology three years ahead of our 2018 plan, and leverage technology, consulting capabilities to expand in new verticals, and offering new and exciting opportunities to our talents."
Alan Herrick, Sapient President, CEO and Co-Chairman, added: "This transaction provides substantial value to our shareholders, offers an ideal cultural match for our people and provides an opportunity to share a wealth of new capabilities with our clients. The Sapient team has been on a 24-year journey building a company with the objective of creating significant impact for our clients and the industries in which they operate. With Publicis Groupe, we have found a partner that accelerates the level of transformation we can drive into the marketplace."
Sapient's global growth
Sapient was founded in Boston in 1990. It survived the dotcom bubble and has been publicly-listed on NASDAQ since 1996. It has a strong global presence with offices in 37 cities and 13,000 people. The company operates three divisions -- SapientNitro, Sapient Global Markets and Sapient Government Services -- that "combine insight, strategy, creativity and technology to drive innovation and to help clients create business opportunities in a highly dynamic environment." The company, which has operations in the Americas, Europe and Asia-Pacific, generated $1.356 billion in revenue for the twelve months ended June 30, 2014.
'Viva la Difference!': A New Unique Platform
With this acquisition, Publicis Groupe will be a leading global communication, marketing, omni-channel commerce and technology group with combined revenue in excess of €8 billion, combined earnings of approximately €1.3 billion and over 75,000 people worldwide.
Publicis.Sapient will be Publicis Groupe's newly created platform focused exclusively on digital transformation at the convergence of communication, marketing, commerce and technology. Publicis.Sapient will be led by Alan Herrick, who has been Sapient's Chief Executive Officer and a member of the Board of Directors since October 2006.
Under the terms of the agreement, Publicis Groupe will acquire all of the outstanding shares of Sapient for $3.7 billion, or $25.00 per share, in cash. The purchase price represents a 44% premium to Sapient's closing stock price on October 31, 2014, the last trading day prior to the announcement of the agreement. Publicis Groupe expects to fund the purchase price with cash on hand and the proceeds of bank and/or capital market indebtedness, without issuing any new equity.
Lévy commented: "Publicis Groupe first anticipated the promising shift to digital nearly ten years ago and has relentlessly and successfully invested in the tech space (Digitas, Razorfish, Rosetta, LBi and Nurun, to name a few of our successful acquisitions), initiating industry-first partnerships to enhance our core business and provide Publicis Groupe's clients with best-in-class expertise. In doing so, we laid the first stones of a new marketing and communications era, one that would echo and engage empowered consumers from the New Age. Sapient is an integral part of our transformation, with its unique combination of marketing, omni-channel commerce and consulting and its depth of technology."
About Publicis Groupe
Publicis Groupe is one of the world's leading communications groups. The Groupe offers a full range of services and skills: digital (DigitasLBi, Razorfish, Rosetta, VivaKi, Nurun), advertising (BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi), public affairs, corporate communications and events (MSLGROUP), media strategy, planning and buying (Starcom MediaVest Group and ZenithOptimedia), healthcare communications, with Publicis Healthcare Communications Group (PHCG), and finally, brand asset production with Prodigious. Present in 108 countries, the Groupe employs 63,000 professionals.