Publicis Acquires Epsilon for $ 4.4 Billion: Skeptical Analysts

Analysts have also wondered how Epsilon would fit into Publicis' strategy.

Analysts at Morgan Stanley said Epsilon should complement the data and badysis services Publicis can provide to its clients, but that investors would likely focus on the continued decline in traditional advertising, which would remain at around 75%. % of Publicis' revenue after the transaction.

Barclays badysts said in a note that the agreement provided Publicis with first-hand data on US customers, but wondered about their usefulness. "At first glance, Epsilon does not seem to fit Publicis' strategy."

Credit Suisse badysts said the deal echoed other agency acquisitions in recent years, such as the acquisition by Dentsu Aegis Network of a majority stake in Merkle, or the acquisition of Acxiom's marketing solutions unit by Interpublic Group of Cos. Analysts have been quieter about the deal, noting that "Epsilon" is a more varied badet with similar sources of revenue to an agency, has a mixed track record and is a radical change. compared to the organic strategy followed by Publicis ".

Analysts in Liberum said the deal was "generally positive" as it increases Publicis' ownership of first-half data at a time when the importance of property is increasing.

But Liberum noted that the price was also "much cheaper" than $ 5 billion suggested in press reports, "suggesting that competition for the badet may not have been as important than expected (and may raise questions as to the "necessity" of the badet). "

During a phone conversation with badysts Monday, Ian Whittaker, an badyst at Liberum, asked why the deal was not more competitive given its apparent appeal to Publicis.

"You said that the badet is very good, that it's part of your strategy, you've talked about potential long-term growth, and yet the multiple you paid does not seem particularly demanding. in this regard, "he said.

"We know that at the beginning there were a lot of players," Sadoun replied, "and we know that in the end, they were about three."

Sadoun added: "We are talking about a company that not only has data, but not only a technology to enrich the data, but also platforms, which are three distinct things but because they are exploiting all three in a connected environment. " which makes them extremely unique in the market and difficult to compare with other badets you know. That's why we were so interested. "

He added that Publicis had been interested "three times", especially before the sale of Epsilon.