Publicis buys Alliance Data's Epsilon for $4.4bn to deepen its digital expertise

Epsilon runs loyalty programs and email marketing and collects data including transactions, location and web activity

Publicis epsilon

Publicis Groupe will pay $4.4 billion in cash to acquire digital marketing firm Epsilon from Alliance Data Systems, as the French advertising group seeks to deepen its digital expertise and expand in the US.

Publicis announced the takeover in a statement two weeks after it confirmed it was in talks with Alliance Data. The owner of agencies Saatchi & Saatchi and Leo Burnett Worldwide is focusing more on data analytics as consumer giants rely less on TV commercials and billboards and shift spending online. Epsilon runs loyalty programs and email marketing and collects data including transactions, location and web activity.

“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,” Arthur Sadoun, Chief Executive Officer, Publicis Groupe, said in the statement.

Publicis said the acquisition will be fully financed by debt and cash on hand and will suspend its share buyback programme, so that it can stick to its 45% dividend payout ratio pledge. The net purchase price will be $3.95 billion after an acquisition-related tax impact, Publicis said.

In a separate statement, Publicis said first-quarter revenue increased 1.7 percent from a year earlier, to 2.12 billion euros ($2.4 billion). The company said it was able to offset client losses in the US with customer retention elsewhere, leading to higher organic growth.

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