Publicis Groupe SA share price down, acquires Sapient Corp. in a $3.7-billion deal to push into digital offers

The third-biggest advertising company in the world – Publicis Groupe SA revealed that it reached an agreement to purchase Sapient Corp. at the price of $3.7 billion. The deal is considered part of the France-based companys strategy to expand its reach into digital offers. The transaction was approved by boards of both companies.

Mr. Maurice Levy, Chief Executive Officer of Publicis, said in a statement, which was cited by Bloomberg: “Sapient is a ’crown jewel,’ a one-of-a-kind company born in the technology space with strengths in marketing, communications, consulting and omni-channel commerce.”

According to the two companies joint statement, the stockholders of Sapient are to get $25 in cash for each share they have. The price tops the October 31st closing price of Sapient by 44%. As the companies revealed today, the Chief Executive Officer of Sapient – Mr. Alan J. Herrick, who is also a Co-Chairman of the company, is to become a Chief Executive Officer of the company after the merger is finalized.

The announcement of the deal comes only a couple of days before Publicis is expected to present its plans for boosting its growth generated from digital advertising to its investors. Recently, the France-based companys chief executive. Mr. Maurice levy has been preoccupied with preparing a new plan, especially after the companys planned grand merger with its U.S.-based competitor Omnicom in May 2014 fell apart.

The purchase of Sapient is supposed to provide Publicis with the opportunity for growth in the high-tech area of the marketing and consultancy industry. In addition, a leading digital advertising agency called SapientNitro is held by Sapient, which is considered to push Publicis even further into online activities.

Publicis Groupe SA lost 3.04% to trade at €53.69 per share by 8:03 GMT in Paris, marking a one year change of -10.64%. The company is valued at €12.21 billion. According to the Financial Times, the 23 analysts offering 12-month price targets for Publicis Groupe SA have a median target of €63.00, with a high estimate of €75.30 and a low estimate of €48.00. The median estimate represents a 13.99% increase from the previous close of €55.27.