Publicis, the world’s third-largest advertising agency, has agreed to buy digital ad specialist Sapient for $3.7 billion in cash as it seeks to accelerate growth after a botched merger earlier this year.
Publicis said on Monday the deal values US-based Sapient at $25.00 per share, which represented a 44% premium to Friday’s close. It will be financed through existing cash and new debt and will not affect Publicis’ credit rating.
For Publicis chief executive Maurice Levy, the deal is part of a push to revitalize the group at a time when its quarterly top-line growth has lagged rivals WPP and Interpublic among others.
Levy has blamed the poor performance on the hangover from Publicis’ failed ‘merger of equals’ with world number 2 ad agency Omnicom, which was announced in August 2013 and abandoned in May over control and cultural clashes.
Levy is betting that Sapient — which earned 63% of 2013 sales in the healthy ad market of North America and has 13,000 employees, 8,500 of which are in India — will help Publicis get back on its feet.