Publicis Groupe and Sapient today announced that they have entered into a definitive agreement under which Publicis Groupe will acquire Sapient in an all-cash transaction for $25.00 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 - focused exclusively on digital transformation and the dynamics of an always-on world across marketing, omni-channel commerce, consulting and technology.
With this acquisition, Publicis Groupe digital revenues will account for more than 50%, three years ahead of 2018 plan. It is aimed to accelerate achieving Publicis Groupe’s objective to become the leader at the convergence of communication, marketing, commerce and technology.
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 Publicisgroupe.com 2/7 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 J. 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.”
With the addition of Sapient, Publicis Groupe is targeting to 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.
Publicis.Sapient will be led by Alan J. Herrick, who has been Sapient’s Chief Executive Officer 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. Herrick 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. He will also serve on Publicis Groupe’s Directoire+. Jerry A. Greenberg, founder and Board Co-Chairman of Sapient, will join Publicis Groupe’s Supervisory Board as an independent member.
The acquisition is expected to be accretive to Publicis Groupe’s headline EPS. In addition to generating run-rate annual cost synergies of €50 million, there will be substantial opportunities for Publicis.Sapient to work together with Publicis Groupe’s other businesses to create new avenues of growth.
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. In connection with its entry into the agreement, Publicis Groupe has obtained a firm financing commitment from Citi.
The transaction has been unanimously approved by the Management and Supervisory Boards of Publicis Groupe and the Board of Directors of Sapient. The acquisition is structured as a cash tender offer for all Sapient shares.