MUMBAI: Paris-based global media communications network, the Publicis Groupe and independent digital communications agency LBi International have reached an agreement where the former will acquire LBi for €416m (?333m).
This is Publicis‘ fourth major acquisition in the digital playground this year following Digitas, Razorfish and Rosetta.
It was reported earlier in June this year that another global giant Omnicom was the forerunner in the race to acquire the agency following WPP‘s acquisition of AKQA, but the French communications player has finally sealed the deal.
With a global footprint, LBi is headquartered and listed in Amsterdam. LBi currently employs approximately 2,200 people in 16 countries (of which 630 are based in the UK) and has 32 offices around the world. The agency is active in digital marketing and has expanded its offering to a wide suite of digital media services, ranging from communication, e-commerce services to brand strategy, content, social media and mobile. Some of LBi‘s clients include Lloyds TSB, Volvo, Johnson & Johnson, Coca Cola, Carlsberg and Ikea.
Led by CEO Luke Taylor, the agency has implemented successive strategic transformations with the acquisitions of Bigmouthmedia and Mr. Youth in 2010 and 2011 respectively and the creation of hubs in key markets to strengthen the company‘s worldwide presence. In 2011, LBi reported net revenue of €196.6 million, up 12 per cent from 2010. In the first half of 2012, LBi reported net revenue of €119.4 million, up 18.2 per cent from the equivalent period in 2011.
The proposed acquisition of LBi will enable Publicis Groupe to increase its share of revenue derived from digital operations to over 35%, in line with its strategic goals, and to capitalise on the complementarity with its existing global digital businesses.
Publicis Groupe chairman and CEO Maurice Lévy said, "The acquisition of LBi is another step forward in further strengthening our digital operations. Within the global advertising landscape, LBi is a well known partner for extraordinary digital customer experiences, based on a blend of creativity and expertise in technology, strategy and social media. The integration of LBi will further enhance our capabilities and, through a wider pool of resources and talent, help deliver innovative and best-in-class services to our clients, which is our relentless focus. Furthermore, this acquisition has a positive impact on our EPS in the first year post acquisition."
Taylor said, "We are convinced that this transaction not only provides highly attractive value to our shareholders, but equally to our clients, staff and partners. Publicis Groupe has consistently demonstrated a clear and emphatic belief in the importance of digital media and is recognised for grooming and managing its talent worldwide. Our entire strategy to date is built on a commitment to relentlessly drive and optimise value for our clients. There is now a unique opportunity to pace set the market and collaborate across new geographies and marketing services so that we can accelerate our strategic plans aimed at providing clients with a globally integrated offering."
