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Publicis Groupe to acquire Sapient in $3.7-bn cash transaction

MUMBAI: Publicis Groupe is set to acquire US-based digital marketing company Sapient in a $3.7-billion all-cash transaction.

As part of the agreement, the French advertising firm will acquire Sapient in an all-cash transaction for $25 per share. The agreement has been approved unanimously by the management and supervisory boards of Publicis Groupe and the board of directors of Sapient.

The acquisition will create a platform to be named Publicis Sapient, which will focus exclusively on digital transformation and the dynamics of an always-on world across marketing, omni-channel commerce, consulting and technology.

Publicis Sapient will leverage the capabilities of SapientNitro, Sapient Global Markets, Sapient Government Services, DigitasLBi, Razorfish Global and Rosetta. The platform is stated to enhance Publicis Groupe’s global leadership, and will help clients better anticipate trends and continue to innovate in the fast-growing and highly dynamic digital environment.

Publicis Groupe chairman and CEO Maurice Levy 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.”

Levy added that this acquisition fulfils many of Publicis Groupe’s objectives. The company now aims to enhance its leadership position in digital, derive 50 per cent of its revenues from digital and technology three years ahead of its 2018 plan, leverage technology, consulting capabilities to expand in new verticals, and offer newer opportunities to its talent.

Sapient co-chairman, CEO and president Alan J Herrick said, “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.”

Publicis will also strengthen its leadership with Herrick joining as CEO of Publicis Sapient, while Sapient co-founder and co-chairman Jerry A Greenberg will join Publicis Groupe’s supervisory board as an independent member.

Lévy commented, “I am extremely pleased to welcome Alan to our senior management team, the Directoire+. He brings deep expertise in technology and the digital world with a stellar track record of innovation, leadership and growth. Our board is equally pleased to welcome Jerry as a new independent board member. These moves support our commitment to redefining the future for our clients.”

Herrick has been Sapient’s CEO and a member of the board of directors since October 2006. During this time, he has led the company through a sustained and significant period of growth. He was named co-chairman of the board in June 2012. He first joined Sapient in 1995 and was instrumental in the top- and bottom-line growth of Sapient’s key business units, having led operations in North America and Europe.

As per a statement, with the addition of Sapient, Publicis will be the leading global communication, marketing, omni-channel commerce and technology group with combined revenue in excess of €8 billion, combined EBITDA of approximately €1.3 billion, and over 75,000 people worldwide.

The combination of Publicis Groupe and Sapient is expected to drive cost savings through the integration of digital production leveraging Sapient’s substantial production infrastructure in India, real estate consolidation, G&A reductions and procurement savings.

The completion of the tender offer is subject to customary terms and conditions, including the tender of at least a majority of the outstanding shares of Sapient, antitrust and other regulatory clearances in the US, and antitrust clearance in Germany. The transaction is expected to close in the first quarter of 2015.

BofA Merrill Lynch and Rothschild acted as financial advisors, and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Publicis Groupe. Goldman, Sachs & Co and Blackstone Advisory Partners LP acted as financial advisors and Cravath, Swaine & Moore LLP acted as legal advisor to Sapient.