Publicis To Buy Sapient For $3.7 Bln Cash

(RTTNews) - French advertising and communications firm Publicis Groupe SA (PUBGY.PK, PGPEF.PK) Monday said it has entered into a definitive agreement to acquire US-based technology consulting company Sapient Corp. (SAPE) for $25.00 per share or $3.7 billion in cash. Publicis.Sapient, the newly created platform will focus exclusively on digital transformation.

The deal is expected to add to to Publicis' headline earnings per share. In addition to generating run-rate annual cost synergies of 50 million euros, there will be substantial opportunities for Publicis, it said.

The acquisition is structured as a cash tender offer for all Sapient shares, and following completion of the tender offer, Boston, Massachusetts-headquartered Sapient will merge with a subsidiary of Publicis Groupe.

Publicis noted that the acquisition will boost its digital operations, and will help to achieve its target of generating 50 percent of its revenues from digital and technology three years earlier than its 2018 plan.

The purchase price represents a 44 percent premium to Sapient's closing stock price on October 31, the last trading day prior to the announcement of the agreement.

The agreement, which has been unanimously approved by the management and supervisory Boards of Publicis and the board of directors of Sapient, is expected to close in the first quarter of 2015.

The acquisition is expected to enable access to new markets and Publicisgroupe.com 2/7, and will help it to create new revenue streams, Publicis stated.

Maurice Lévy, chairman and CEO of Publicis Groupe said, "Sapient is a 'crown jewel,' a one of a kind company born in the technology space with strengths in marketing, communications, consulting and omni-channel commerce, all of which are equally important to best help clients achieve their digital transformation."

The combined company is expected to generate revenue above 8 billion euros, and EBITDA of around 1.3 billion euros, with over 75,000 people worldwide.

Publicis plans to fund the purchase price with cash on hand and proceeds of bank and/or capital market indebtedness, without issuing any new equity.

Publicis.Sapient will be led by 0Herrick, who has been Sapient's chief executive officer and a member of the board of directors since October 2006. He joined Sapient in 1995.

In Paris, Publicis shares closed Friday's trading at 55.27 euros. Sapient ended at $17.32 on the Nasdaq.