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PARIS (Reuters) – Publicis will pay $ 4.4 billion for the acquisition of Alliance Data's Epsilon marketing division, the French advertising group announced on Sunday, expanding its digital business and presence in North America .
Announcement of the agreement, two weeks after Publicis confirmed purchase discussions, reinforces the efforts of the world's third-largest advertiser to adapt to a rapidly changing, data-driven marketplace customers online.
"The addition of Epsilon will propel Publicis as a leader in custom-built, data-driven experiences," the Paris company said in its statement.
Publicis and other traditional advertisers have lost ground in a market increasingly dominated by Facebook, Google and the digital marketers who track and target individual customers via their smartphones.
The French group's shares collapsed after the loss of fourth-quarter results in February and fell by 15% in the last 12 months.
The purchase of Epsilon is "a very important investment for a company of our size," said Arthur Sadoun, General Manager of Publicis. "But we are convinced that this is the right choice … in a world where data is at the heart of all decisions and where the mobile phone has become our main interface."
Epsilon, which holds a wealth of data on some 160 million customers, generated $ 1.9 billion in sales last year, almost entirely in the United States.
The cash price of $ 4.4 billion is $ 3.95 billion before tax, which is 8.2 times Epsilon's earnings before interest, taxes, depreciation and amortization (EBITDA) for 2018, Publicis said.
The French company has announced that it would cancel a previously announced share buyback and would fund the deal with Epsilon with debt, adding that this acquisition would have a positive impact on earnings and cash flow from the company. 39 next year.
Report by Laurence Frost and Gwenaelle Barzic; Additional report by Gilles Guillaume; Edited by Susan Fenton
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