Publicis Groupe announced today that it had entered into a definitive agreement to acquire Sapient for $3.7 billion in cash. Though it had undertaken its ill-fated merger with Omnicom to pad out its creative capabilities, Publicis played to its strength in buying Sapient, an agency grounded in digital technology.
“Sapient is a crown jewel, a one of a kind company born in the technology space with strengths in marketing, communications, consulting, and omnichannel commerce,” said Publicis Chairman and CEO Maurice Levy. “This acquisition fulfills many of Publicis Groupe’s objectives. We will enhance our leadership position in digital, achieve our goal of deriving 50% of our revenues from digital and technology three years ahead of our 2018 plan, and leverage technology, consulting capabilities to expand in new verticals.”
Publicis immediately announced plans to introduce Publicis.Sapient, a platform merging communications, marketing, commerce, and technology components. A combined effort of Sapient and current Publicis units DigitasLBi, Razorfish, and Rosetta, Publicis.Sapient aims to deliver “transformational services to clients through a model that has unmatched reach and capabilities,”the company boasted in a press release.
But that remains to be seen, says Larry Chiagouris, former chairman of the Advertising Research Foundation. “It has the potential to enhance the already well-established digital portfolio continuing to be developed at Publicis; however, there will be many major obstacles in making a Publicis-Sapient entity work,” said Chiagouris, a professor of marketing at Pace University. “These are companies that have operated in very different sectors and it remains to be seen whether any hoped-for synergy can ever grow to become a substantial source of new revenue for either Publicis or Sapient.”
Founded in 1990 as a company that used technology to mine marketplace insights that aim to help clients drive innovation, Sapient entered the agency space with its $50 million acquisition of Nitro Group in 2009. Besides Sapient Nitro, the company operates Sapient Global Markets and Sapient Government Services in 37 cities globally. It has more than 13,000 employees and posted $1.35 billion in revenue for the twelve months ended June 30.