Publicis Group aims to dominate digital marketing space with US$3.7bn Sapient acquisition

European headquartered marketing agency, Publicis Groupe, has acquired marketing consultancy and omni-channel technology group, Sapient, for US$3.7 billion as it seeks to lead the converging marketing, commerce and technology space.

Under the agreement, the two organisations plan to create a new platform, called Publicis.Sapient, which will focus on digital transformation consulting services and technology. The combined group will also leverage Publicis-owned businesses, Razorfish Global, Rosetta and DigitasLBi.

Sapient CEO and co-chairman, Alan J Herrick, will join Publicis’ senior leadership team as CEO of Publicis.Sapient, while its co-founder and co-chairman, also joins the Publicis Groupe Supervisory Board.

Publicly listed Sapient was founded in 1990 in Boston and now has offices in 37 cities including Sydney, Melbourne and Brisbane, with a total of 13,000 staff. The business is divided into three divisions, SapientNitro, Sapient Global Markets and Sapient Government Services, and chalked up US$1.356 billion in revenue in the year to 30 June, 2014.

SapientNitro strategy director: Obsession with digital in marketing inhibits innovation

Customers stretch across retail, financial services, technology, consumer packaged goods, travel and leisure and government.

“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,” said Publicis Groupe chairman and CEO, Maurice Levy, following the announcement.

“It will also give Publicis Groupe access to new markets and creative new revenue streams.”

The deal gives Publicis Groupe a huge boost to its digital marketing capabilities and resource pool. The company noted that it will now achieve its goal of deriving 50 per cent of total revenues from digital and technology services three years ahead of its 2018 plan, while opening up the ability to address new verticals.

Combined, the two companies will boast of total revenues exceeding 8 million Euros and 75,000 people globally. The deal is an all-cash transaction and has already been approved by the boards of both companies.

In a statement, Herrick said the transaction was an “ideal cultural match” and paves the way to offering a deeper set of services to its 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,” he said. “With Publicis Groupe, we have found a partner that accelerates the level of transformation we can drive into the marketplace.”

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