Publicis to Buy Digitas for $1.3 Billion

  |  December 20, 2006   |  Comments

One less standalone digital agency on the landscape.

Publicis Groupe is preparing to acquire Digitas in an all-cash deal worth $1.3 billion.

With the purchase, Publicis snatches up one of the few remaining large-scale standalone digital agencies. Digitas is also among a small handful of publicly traded digital marketing agencies; the top remaining public digital marketing firm in the U.S. is aQuantive, which offers technology as well as services.

Digitas will bring to Publicis an extensive Fortune 500 client base and relationships with top dog Web platforms including Yahoo, Google, MSN, Fox Interactive Media and AOL. Shared clients include Procter & Gamble, Heineken, Hewlett Packard, General Motors and AstraZeneca. Publicis chairman and CEO Maurice Levy said the combined company will have 85 to 90 percent of the AstraZeneca account.

Publicis will also leverage its global reach to expand Digitas' internationally, and will absorb some of its considerable production burden.

"Global labor pools and automation [will allow us] to do things more efficiently," said Digitas Chairman and CEO David Kenny on an investor call following the announcement. "This will allow us to invest more in creativity with clients."

Publicis had pursued Digitas for a year, according to Levy. "We were missing not a link but a major step, and the major step is now happening," he said on an investor call discussing the agreement. "This will enable Publicis Groupe to have the most comprehensive digital offering in the most important market, the U.S." Earlier this year, Publicis acquired Atlanta-based digital agency Moxie Interactive.

Publicis continues to weigh its offerings toward digital media to a greater degree than competing agency holding companies. With the acquisition, the company says interactive revenues will account for 15 percent of its total billings. Earlier this year it launched Denuo, an all-star digital agency led by interactive luminaries Nick Pahade and Rishad Tobaccowala.

Digitas's Kenny has committed to three years with the company post-acquisition. He said other senior managers have renewed contracts as well. Roughly 100 executives at Digitas had equity-based compensation.

Digitas specializes in digital and direct marketing, including brand strategy, online advertising, search marketing, e-mail marketing, CRM, and analytics. It also offers offline direct marketing via mail, television and print. The firm owns Modem Media, which it acquired in 2004, and Medical Broadcasting, an agency serving the healthcare vertical.

Should the deal close, Digitas stakeholders will receive $13.50 per share. The merger is likely to close in the first or second quarter of 2007.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...