Publicis buys Razorfish for $530 million

Share this content:
After speculation and rumors for the past month or so, Microsoft Corporation has sold its digital agency Razorfish to the Publicis Groupe SA holding company in a transaction valued at approximately $530 million in cash and treasury shares.

Publicis is already well-positioned in the digital agency space with its VivaKi division, which comprises Digitas, Starcom MediaVest Group, Denuo and ZenithOptimedia.

“The acquisition of Razorfish is another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients," said Maurice Levy, chairman and CEO of Publicis Groupe in a statement.

Razorfish will continue to operate under its brand name and be organizationally part of VivaKi, the Publicis Groupe entity created in June 2008. Razorfish's management team, led by CEO Bob Lord, will remain unchanged. “Being a part of the Publicis Group, we are able to broaden our offering capability that we wouldn't be able to do before, as a digital agency. For example, we could partner with a more traditional media agency like Starcom MediaVest on a pitch,” said Lord. “This acquisition also expands our global reach faster. We've been growing this effort, but now that we are a part of the Publicis network, we will be able to build it at a faster rate.”

The acquisition will make digital an even more significant part of Publicis' business. In the statement, Levy highlighted the fact that after the transaction in completed, “…approximately a quarter of our annual revenues will come from digital communications, and we believe we have more capacity to grow with new clients.” Major clients of Razorfish include Best Buy, Ford, McDonald's, Microsoft and Starwood Hotels.

Microsoft and Publicis have also signed a strategic alliance agreement that will become effective at the closing of the transaction. Publicis Groupe media clients will be able to buy display and search advertising from Microsoft over the five-year term of the agreement for a discounted price, in exchange for certain minimum guaranteed aggregate purchase levels.

Razorfish will also continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, and Microsoft will spend a minimum amount for these services each year during the term of the agreement.

The deal will be paid out in cash and in 6.5 million Publicis Groupe treasury shares. The cash component of the purchase price will be determined based on the value attributed to the shares calculated by the average closing price of Publicis Groupe stock during the 20-trading-day period ending on the eighth business day prior to the closing date of the transaction.

The transaction is expected to close during the fourth quarter of 2009, and is subject to customary closing conditions, including clearance under the United States Hart-Scott-Rodino Antitrust Improvements Act.


Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above