In case you missed it yesterday, Publicis Groupe attempted to make up for its own performance issues over the weekend by snapping up Sapient for $3.7 billion in cold cash (and so close to Christmas, too!).
It’s true that these talks could fall through just as the Publicis/Omnicom merger did last year, but for now it seems that the next phase in the group’s “transformation into a digital-technology company” will indeed go through this week.
As a reader put it this morning, “Idea engineers own the ad industry” — and Publicis is very interested in engineering as many ideas as possible. Moving forward, does this mean less focus on the work and more on the data behind it?
So far, the move has been good for business: USA Today notes that Sapient stock rose more than 40% this morning, largely because Publicis agreed to pay nearly 150 percent of each share’s most recent value.
Some hints as to what this means from Publicis Groupe’s own press release:
- The move “will create a platform to be named Publicis.Sapient…focused exclusively on digital transformation and the dynamics of an always-on world”
- It will also allow Publicis to brag that “digital revenues…account for more than 50%” more than three years ahead of schedule
- The only staffing changes (for now) concern the appointment of Sapient CEO/Co-Chairman Alan J. Herrick to CEO of Publicis.Sapient and a seat at the Publicis senior management table; Jerry A. Greenberg, Sapient’s co-founder and co-chairman, will also join the Groupe’s supervisory board.
The release notes that the acquisition will allow Publicis to enhance its own global leadership status and “help clients better anticipate trends and continue to innovate in the fast-growing and highly dynamic digital environment” while also giving the group “access to new markets and…new revenue streams.”
Sources for Noreen O’Leary of Adweek aren’t so sure. An analyst quoted in her piece today says the move adds “little” strategically despite all that jargon, and he essentially says that, since Publicis failed at acquiring another holding company, this was simply the second-best big thing.
It’s worth noting that some staffing changes have occurred in recent weeks at Sapient; ECD John Carstens left the agency’s Chicago office to go freelance one month ago and six weeks ago a spokesperson told us that recent layoffs in the same office could be attributed to “our normal course of business.” We expect more shifts to follow.
The big questions: what will the new work look like? And where will the “workforce reductions” fall?
UPDATE: A contact who previously worked at Sapient tells us that many current employees were taken aback by the acquisition announcement. Seems that many who worked there talked about their shop as “the anti-holding company” and spoke of transcending the agency model itself. You can re-read the press release, but you won’t find anything like that in it.