Publicis says the acquisition will give the agency group access to new markets and the ability to create new revenue streams. It also means the group wil achieve its target of deriving 50% of its revenues from digital three years ahead of its 2018 plan.
The transaction will also create a communications, marketing, omni-channel and technology group with combined revenues in excess of €8 billion and combined EBIDTA of approximately €1.3 billion. It also means Publicis will now have a workforce of more than 75,000 people worldwide.
Publicis says the new group will deliver around €50 million in cost savings, through the integration of digital production, particularly leveraging Sapient's production infrastracture in India, some real estate consolidation, G&A reductions and procurement savings.
The purchase is Publicis' latest effort to bolster its digital offering and comes five months after Publicis called off its attempt to form a merger with Omnicom Group.
Sapient's share price last closed at $17.32 and its stock has seen a sharp run up since late October, suggesting investors knew an acquisition could be approaching. Publicis Groupe's stock is currently up on its close last night of $54.04.
The acquisition wil create a platform to be named Publicis.Sapient, which the companies say in statement will create the "largest and most advanced" platform focused exclusively on digital transformation and "the dynamics of an always-on world across marketing, omni-channel commerce, consulting and technology." Publicis.Sapient will also include other Publicis digital agencies including DigitasLBI, Razorfish Global and Rosetta.
Publcis.Sapient will be led by Sapient CEO Alan Herrick. He first joined the company in 1995 and became the company's chief and a member of the board of directors in 2006. He was named co-chairman of the board in June 2012.
Sapient's clients include Coca-Cola, Unilever and Audi. The company has delivered compound annual revenue growth of 15% from 2010 to 2013.
In a statement, Publicis Groupe CEO and chairman Maurice Levy says: "Sapient is a 'crown jewel,' a one of a kind company born in the technology space with strengths in marketing, communications, consulting and omni-chanel commerce, all of which are equally important to best help clients achieve their digital transformation."
The transaction has been approved unanimously by the management and supervisory boards of both companies. It is still subject to regulatory approval and is expected to close in the first quarter of 2015.
News of the acquisition comes just a few days after the chief executive of rival advertising holding group WPP, Sir Martin Sorrell, said his company's $25 million stake in AppNexus left Publicis and Omnicom with "nowhere to go" when it comes to digital advertising.
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