Publicis Groupe builds marketing transformation might with US$4.4bn acquisition of Epsilon

Marketing and communications agency giant gains access to first-party customer data technology and proprietary platform

Publicis Groupe is jostling for a stronger position in the marketing transformation solutions space and has acquired marketing services and data company, Epsilon for a total US$4.4 billion.

The marketing and communications agency giant confirmed the purchase of Alliance Data Systems Corporation’s business yesterday, based on a net purchase price of $3.95bn, based on an 8.2X EBIDTA multiple. The company said it’s also building a strategic partnership with the remaining Alliance Data business.

The deal is aimed at accelerating Publicis’ efforts to provide transformation services to marketers.

Epsilon provides marketing technology as well as data services for customer interaction management. Around since 1969, the company has 9000 staff across 70 offices worldwide and chalked up US$1.9 billion in net revenue in 2018, 97 per cent of which was in the US.

The business was acquired by Alliance Data Systems for US$300 million back in 2004. Since then, and like many in the martech sphere, Epsilon has bulked up by purchasing several complementary organisations including performance marketing player, Hyper Marketing (2012) for US$460 million, Aspen Marketing Services (2011) and Abacus (2006) for $435 million.

Key offerings today include a proprietary software suite to pool first-party customer data from CRM, email and loyalty systems; the proprietary Conversant data platform covering 200 million people and their demographic, transactional and behavioural insights data offline and online; AI for segmentation and analytics, and measurement and real-time optimisation solutions.

Clients include Sephora, Valvoline, Volvo, Norwegian Cruise Line, Dell, Walgreens and Marriott.

“Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations,” Publicis Group chairman and CEO, Arthur Sadoun, said. “The only response is to deliver personalised experiences at scale. They have to transform to meet this new market imperative.

“With the acquisition of Epsilon, Publicis Groupe is bringing the necessary technology, expertise and the talent to complement our offer in creativity, media and business transformation, and help our clients leapfrog their competition and grow profitably.”

The company highlighted 3700 data scientists, great tech and artificial intelligence (AI) teams and Epsilon’s leadership team, as key reasons for the deal. Sadoun said the deal was expected to deliver double-digit accretion of headline EPS and free cash flow within its first year.

Alliance Data Systems president and CEO, Edward J. Heffernan, saw the latest acquisition as “a trifecta win for Alliance Data, Epsilon and Publicis Groupe”. The deal comes after extensive efforts to explore strategic options for Epsilon, he said.

“With this transaction, we have found what we believe to be the right home for Epsilon’s technology, data assets and associates,” he said. “Publicis Groupe will be the ideal cultural; and strategic fit for Epsilon and its Conversant business, and will help drive Publicis Groupe’s own transformation in today’s data-driven digital world.”

Alliance Data revealed it was exploring the possible sale of Epsilon erupted last November as part of a strategic review of the business. The decision came just months after rival player, Acxiom, sold off its marketing solutions business to the Interpublic Group of Companies for US$2.3 billion.

 Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Thanks for your feedback, Rabi. While we introduced the ROO concept using a marketing example, I also believe that it is pertinent to man...

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Thanks for your insight, Philip. Return On Outcome (ROO) requires balanced thinking with the focus on outcomes as opposed to returns.

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Beautiful article.

Hodlbaba

15 brands jumping into NFTs

Read more

"Blue" is really gorgeous and perfectly imitates a human customer support operator. Personally, I won't order a chatbot development for m...

Nate Ginsburg

Why the newest member of BT’s contact centre is a chatbot

Read more

As today’s market changes rapidly, the tools we use change, and it is important to adapt to those changes to continue to succeed in busin...

Anna Duda

Report: 10 digital commerce trends here to stay

Read more

Blog Posts

How the pandemic revealed the antidote to marketing’s image problem

What does marketing truly ‘own’ in most organisations? Brand and campaigns, definitely. Customer experience? That remains contested ground.

Murray Howe

Founder, The Markitects

Still pursuing a 360-degree view of the customer?

On the Internet, nobody knows you’re a dog.” It may have been true in 1993 when this caption to a Peter Steiner cartoon appeared in the New Yorker. But after 30 years online, it’s no longer the case.

Agility in 2022

Only the agile will survive and thrive in this environment and that’s why in 2022, agility will need to be a whole-business priority.

Sam McConnell

Melbourne bureau chief, Alpha Digital

Sign in