Publicis Groupe SA, a French conglomerate, by paying $3.7 billion to Sapient Corp will merge together to form as PublicisSapient. In fact, Stockholders of Sapient Corp. will be receiving in cash $25 per share, which is 44 percent premium to Sapient’s 31, 2014 stock closes in New York. Interestingly, Publicis has paid 19.2 times Sapient’s earnings and that too before the major financial burdens calculation.
Strategy & Outcome
Earlier Publicis Groupe SA was eager to take over Omnicom Group Inc. by $ 35 billion. But, the consultants of Publicis, Saatchi & Saatchi and Leo Burnett advised to merge with Sapient.Because Sapient will be able to generate half of its revenue from their broad ranges Omni channel marketing technology services three years ahead of plan.
CEO of Publicis, Maurice Levy, 72, from his foresight announced on a conference call that digital innovation marketing pace is becoming faster than earlier and therefore, on behalf of their clients Publicis Sapient will be able to take great challenges. It is a big step for Publicis Groupe to increase the width of digital offerings to their clients. Moreover, the acquisition and formation of Publicis Sapient will assist to widen their business globally.
Players Behind the Synergy of Fund Creation
Earlier, Publicis intended to create the fund with cash and borrowing to purchase without offloading their stocks. The company after getting the firm financing commitment from Citigroup Inc. moves to merge with Sapient. The merger transaction will generate $62 million by 2015 first quarter. For this transaction Bank of America Corp and Rothschild acted as Financial Adviser and Wachtell, Lipton, Rosen & Katz given legal assistance to Publicis. On the otherside, Sapient’s Fiancial Advisor and Legal Advisor were also present. Both Groups’ of Boards have offered Alan J. Herrick to become CEO of Publicis.Sapient.read more