Digitas Inc. agreed to buy Modem Media Inc., one of the oldest U.S. interactive ad agencies, in a stock-for-stock transaction valued at nearly $200 million.
The deal, announced yesterday, is to close in the fourth quarter, pending a regulatory green light and shareholder approval from both agencies.
The purchase yields Modem Media clients like America Online, Allianz, Heineken USA, The Home Depot Inc., Philips Electronics, PricewaterhouseCoopers, General Motors Corp., IBM Corp., Kraft Foods, Hewlett-Packard Co., Sprint Corp. and Delta Air Lines. But both agencies already share many of these clients.
Opened in 1987, Modem Media has more than 270 employees in London, San Francisco and its Norwalk, CT, headquarters. The agency will keep its name, and the respective office chiefs will keep their jobs.
In other plans, the Digitas London and San Francisco offices will merge with the Modem Media operations in those cities. Martin Reidy, president of Digitas San Francisco, will head Modem Media after the deal goes through. And a Modem Media director will join the Boston-based Digitas board.