Publicis Groupe Confirms That It Is Exploring Potential $5 Billion Epsilon Acquisition

Advent International, Goldman Sachs also reportedly bidding

Arthur Sadoun, CEO of Publicis Groupe
In his statement, Publicis CEO Arthur Sadoun attributed the slowing growth to “attrition” from “a handful” of the company’s fast-moving consumer goods clients. Getty Images
Headshot of Patrick Coffee

Early this morning, Publicis Groupe issued a statement confirming earlier reports that it is one of at least two parties exploring a potential acquisition of Epsilon, the marketing services company owned by Alliance Data Systems Corp.

Bloomberg first reported on Friday afternoon that Publicis entered a bid for the company alongside a joint offer from Goldman Sachs and global private equity firm Advent International, which also invests in such marketing businesses as Ansira Holdings and U.K.-based Williams Lea Tag Group.

The price tag for Epsilon, according to Bloomberg’s sources, could be as high as $5 billion. A late November Wall Street Journal report that first confirmed the potential sale listed Epsilon’s revenue for fiscal year 2018 at $2.2 billion.

“Publicis Groupe confirms that it is studying the potential acquisition of Epsilon, which is currently under a sale process by Alliance Data Systems Corporation,” read the statement published just after 5:30 a.m. “Epsilon is a major player in data and targeted marketing solutions (mass personalization) operating mainly in North America.”

The note continued, “The Group’s governing bodies feel an obligation to study any possibility to strengthen its position thanks to assets that could fit the Group’s strategy and bring an enhanced service to the Group’s clients while reinforcing its competitiveness for the future.”

The holding company added several significant qualifiers, writing that it could not at this time “give any indication on whether a transaction would materialize or not and, should the Group decide to make an offer, under which terms and conditions.” Finally, it reminded readers of other recent, unspecified instances in which it “studied potential targets but chose not to make any offer as the contemplated transactions did not meet the necessary criteria.”

Publicis Groupe did not elaborate beyond the statement above. Spokespeople for Epsilon, Goldman Sachs and Advent International declined to comment.

The Wall Street Journal reported that Alliance first considered selling Epsilon after an “internal review of operations” inspired, at least in part, by IPG’s July 2018 acquisition of database marketing company Acxiom for $2.3 billion. Publicis similarly acquired digital firm Sapient in 2015 for $3.7 billion, later merging it with Razorfish to form consultancy division Publicis Sapient. The latter’s rebranding debuted in February.

Epsilon has made several other changes since news of the potential sale first broke late last year. Several months ago, the company stopped working with its primary PR firm and parted with chief creative officer and six-plus-year veteran John Immesoete. According to sources who spoke to Adweek on condition of anonymity, he was terminated in late November.

@PatrickCoffee Patrick Coffee is a senior editor for Adweek.