Publicis Groupe buys Epsilon in the $ 4.4 billion deal
Explanation: An earlier headline on this story described the transaction as a $ 3.95 billion deal. Under the terms, Publicis will purchase Epsilon for a cash consideration of $ 4.4 billion with a net purchase price of $ 3.95 billion after deducting the benefits of acquisition-related tax tightening.
Publicis Groupe acquires data marketing Gigantic Epsilon in a $ 4.4 billion deal, the holding company announced Sunday. The transaction is expected to close in the third quarter.
"With the acquisition of Epsilon, Publicis Groupe provides the necessary technology, expertise and talent as a complement to our offer in creativity, media and business transformation, and help our customers skip the competition and increase profitability," said Publicis Groupe Chairman CEO Arthur Sadoun in a statement, adding that the deal will help Publicis "deliver customized scale scales" to its customers.
According to the Publicis agreement, the holding company will acquire Epsilon for a $ 4.4 billion cash consideration. represents a net purchase price of $ 3.95 billion, "after deducting the benefits of acquisition-related tax cuts," according to the statement.
Epsilon sales are the largest agency this year, approaching Dentsu Inc.'s $ 4.9 billion purchase of Aegis Group in 201[ads1]3 (the largest acquisition of an agency company) and WPP's $ 4.37 billion purchase on Young & Rubicam in 2000. (WPP announced Y & R as a 4.7 mile The dollar dollar transaction, but the final value of the stock in that corporation was $ 4.37 billion. ) However, an acquisition of Publicis will not change the top of the agency's rankings. Publicis will continue as the world's third largest agency, behind WPP and Omnicom Group.
Epsilon, owned by Irving, Texas-based Alliance Data Systems since 2004, is ranked as the world's 13th largest agency, according to Ad Age Datacenter. In the statement Sunday, Publicis said Epsilon had $ 1.9 billion in net sales in 2018, with 97 percent of that from the US Epsilon has 9,000 employees, including 3,700 data scientists.
Epsilon's loyalty software serves 600 million accounts and it has "more than 250 million unique consumers identified in the United States, and the proprietary Conversant platforms handle 1 billion updates every 5 minutes, enabling messages to be passed on consumer insights. in a real time, "according to the Publicis statement.
The agreement for email and data marketing juggernaut comes after Alliance Data in November last year said it was "exploring strategic options for its Epsilon business", including "a potential sale of the business." Other parties expressing interest in Epsilon, including Goldman Sachs.
Bryan Kennedy, CEO of Epsilon, stated in a statement: "During extensive discussions with Publici's leadership team in the last revision process, w I have found a strong common ground, including shared values and a strong vision for the future of the data drive. , digital-first marketing. "
The Publicis agreement follows the Interpublic Group of Cos. October acquisition of another data venture, Acxiom, for $ 2.3 billion.
The transaction comes as Publicis interferes with changes in the advertising market, including the decline in traditional advertising, digital displacement, cost pressures from customers and competitive challenges from consulting firms. 19659003] The current landscape of industry leaders provides high premiums on first-time data, which is significantly more accurate than third-party data, and allows marketers to create personalized, targeted ads that often increase conversions.
The acquisition gives Publicis an arsenal of tools that can help it with marketers, as Epsilon is equipped with a wealth of first-party data – something that was previously lacking in Publicis.
"Publicis entered this acquisition for the data and identity resolution piece" Jay Pattisall, an agency analyst at Forrester, says. "Publicis used previous third-party data sources, but what Epsilon brings is a proprietary set of first-time data segments and identity resolution."
Pattisall says he believes Publicis will integrate Epsilon into existing solutions, pointing to the company's "Power of A motto, as opposed to creating two separate businesses, ie" Publicis Epsilon. "Such integrations would be good for the holding company
For example: Conversant, Epsilon's advertising engineering automation business, would serve a media agency like Starcom well, Publicis Spine, which handles the kind of data benefits that Epsilon brings to the table, is another obvious, more appealing fit, Pattisall says.
"Several datasets come together and it helps activate the audience across channels," he adds. "It's the purpose of these engines, and now Publicis has an identity resolution capability in the house that they can store over what they already have have. "
Generally speaking, Epsilon makes money through its data management offering, its loyalty platform and, to some extent, Conversant, an ad technology gibolag specializing in market automation.
However, the biggest appeal for a company like Publicis is probably Epsilon's ability to match different pieces of consumer data – email and IP addresses, for example – to build different consumer segments that marketers use for both better targeting and creativity.
Alliance Data acquired Epsilon for $ 314.5 million in October 2004 and expanded Epsilon through acquisitions.
On April 1, Publicis confirmed that it was in talks to buy Epsilon. Publicis shares fell to EUR 45.12, the lowest price since 2012. The Publicis shares closed on April 12 in Paris at EUR 47.19, up 0.9 percent for the day. Alliance Data shares closed on April 12 to $ 180.93, up 3.0 percent.
Contributing: Bradley Johnson, E.J. Schultz
