Sapient, a “Crown Jewel”
The Boston based, digital marketing firm, Sapient has been purchased for a whopping $3.7 billion by a French advertising group, Publicis. This values the company at $25 per share launching its price up over 40% Monday morning. The move will allow Publicis to gain access to new markets and broaden their revenue stream through the various digital and ecommerce services Sapients offers. Originally, Publicis planned to increase its revenue from digital to 50% by 2018, the recent acquisition will allow them to do so three years ahead of schedule.
The product of the deal will yield a company that specialized in communications, marketing and technology with over 75,000 employees and combined revenues of $9.9 billion. The rationale behind the offer is backed up through the cost savings that Publicis will endure over the next three years, an estimated $62 million. Saving will be realized in departments such as digital production, real estate consolidation, G&A reductions, and procurement savings.
A healthy Sapient has seen revenue growth of 12.3% from 2012 to 2013, and compound annual revenue growth of 15% from 2010 to 2013. With company culture and vision aligning similarly, coupled with the monetary benefits, Publicis offers a strong reasoning for the acquisition. Strengths in communications, marketing, consulting, and commerce through all types of channels makes the acquired a powerhouse of performance for the future of the digital world.
The new piece of the French powerhouse will be titled Publicis.Sapient, and will have Sapient CEP Alan Herrick at the helm. Along with Herrick, 30 additional Sapient executives will be agreeing to long term deals with the new platform.
Rivals to Publicis include WPP holding group, who criticized the failed attempt at a merger between Publicis and Omnicom. A disappointing third quarter earnings call resulted from a “distracted” Maurice Levy due to the collapsed deal. This deal seems to have sparked optimism among stakeholders with the potential Sapient brings to the Group.
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