Sapient to Buy Nitro for $50 Mil.

NEW YORK Sapient is making a big play into the agency space by paying $50 million to acquire Nitro Group.

The deal will instantly transform Sapient from a shop primarily known for its Web design and infrastructure business into a through-the-line shop with deep technology chops. The company plans to maintain two agency brands, Sapient Interactive and Sapient Nitro, while sharing technology, strategy and other capabilities.

“What clients want is a digitally centered agency that has traditional capability,” said Gaston Legorburu, worldwide creative officer at Sapient. “They don’t want a traditional agency that’s bolted on some digital capability.”

Nitro has 300 employees and offices in New York, London and Shanghai. Its clients include Nike, ConAgra, Volvo and Mars. Combined with Sapient, the company will have a presence on four continents and a total of 6,000 employees.

With global reach and capabilities in both traditional and digital, the company hopes to establish itself as a credible alternative to agency networks within the holding companies.
“I know we can get to what clients want a hell of a lot faster than McCann Erickson or Grey,” said Legorburu. “They have to fight legacy and politics and holding company structures.”

Nitro CEO Chris Clarke (pictured above) will have the same title at the agency, with Sapient’s Gaston Legorburu serving as worldwide creative officer. The cash and stock deal is expected to close next month.
The move highlights the race by many agencies to redefine themselves in the era of digital technology. While long-established players have spent years beefing up their online offerings, Web shops have added traditional advertising capabilities. The latter are betting that brand expertise is easier for them to add than interactive capabilities are for old-media shops to acquire.

“It’s going to be a lot easier to take over digital on the Nitro clients than it will be for us to take over brand strategy with Sapient Interactive clients,” Legorburu said.

Sapient began its move to position itself less as an IT consultancy that concentrated on back-end systems and more as an agency with the acquisition of Miami-based Planning Group International three-and-a-half years ago.

According to The Wall Street Journal, Sapient also held talks with Modernista! and Wieden + Kennedy.

“It’s ballsy, but it’s really really smart,” said Legorburu. “Ninety percent of the money is sitting in traditional and 10 percent is in interactive. Those dollars continue to shift, but we’re going to get at those dollars a lot faster than our digital peers.”

Roth Post Advisors, the mergers and acquisitions arm of Roth Associates here, represented Nitro in the deal, according to Richard Roth, a partner in the practice.