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Boston-Based Sapient Acquired By Publicis Groupe For $3.7 Billion

Sarah Kuranda

Global technology services company Sapient has been acquired by Paris-based Publicis Groupe for $25 per share, or $3.7 billion, the two companies revealed Monday.

The Publicis Groupe is a wide-ranging communications company that offers services in digital, advertising, public affairs, corporate communications and events, and more. Prior to the acquisition, it had a global footprint in 108 countries with 63,000 employees.

The blockbuster all-cash deal gives Publicis Groupe access to the marketing, omni-channel commerce and consulting expertise from Boston-based Sapient. It adds offices in 37 cities and 13,000 employees. The combined companies will be worth more than €8 billion, or around $10 billion, in annual revenue.

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Publicis Groupe Chairman and CEO Maurice Levy said on a webcast that the acquisition is a "very significant step" for the company as it looks to keep pace with emerging technologies and a digital world. Levy said that the Publicis Groupe has been investing for many years in its digital capabilities as customers look for a partner to deliver an "unparalleled set of capabilities" in communications, marketing, consulting and commerce.

"The acquisition of Sapient will allow us to lead at the convergence of all of these areas. We will be a communications, marketing, commerce and digital powerhouse helping our clients succeed and thrive by delivering profoundly transformational services through a model with unmatched reach, scale and capabilities. That will create a remarkable foundation for accelerated growth," Levy said on the webcast.

In addition, Levy highlighted a strong talent pool, technical capabilities, culture, geography and financials as reasons why Sapient was a "perfect" acquisition for Publicis' strategic goals.

The acquisition is in response to "dramatic changes in the market" that are happening, Levy said. It will put Publicis ahead of its game plan when it comes to digital services, with digital revenue accounting for 50 percent of revenue overall ahead of the 2018 goal, as well as accelerate growth across the business.

"This disruption demands innovative solutions ... this is about the new age of consumption that demands capability across the spectrum of convergence. It demands addressing the client needs today, which means being at the forefront of the convergence of marketing, consulting, technology and commerce," Levy said. "The time is now, and this is happening under our very eyes."

The combined companies will launch a platform called Publicis.Sapient that will focus on the convergence of the megatrends that the companies see as key in today's digital world: marketing, commerce, communication and technology. The new platform will bring together the capabilities of multiple divisions of Sapient and Publicis into a single platform for what the company calls "transformational services."

It is a "game changing idea" that will "really deliver on the transformational opportunity in the marketplace and create value for clients," Sapient CEO and Co-Chairman Alan Herrick said on the webcast. Herrick will join the senior management team of Publicis Group as CEO of Publicis.Sapient in the transition.

"The acquisition of Sapient will give birth to the largest, most advanced platform, focused exclusively on the digital transformation and the dynamics of an always-on world," Levy said.

The Publicis Groupe's and Sapient's board of directors unanimously approved the deal.

PUBLISHED NOV. 3, 2014

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