French advertising conglomerate Publicis Groupe has acquired independent Boston-based ad agency Sapient Corp. for $3.7 billion in a deal that was announced on Monday morning.
Sapient’s current co-chairman and CEO Alan Herrick will be CEO of the new Publicis.Sapient group, which will add Razorfish Global and Rosetta, two other subsidiaries of Publicis within the new company. The creation of that organization is expected to increase the total revenue that Publicis receives from digital and interactive services to 50 percent.
Most of the principals involved noted that Sapient’s production operations in India will help cut costs for the new firm, while also stating that the offices of certain unnamed subsidiaries will be consolidated.
Almost eight years ago, Publicis purchased another Boston digital-related company, Digitas, for $1.3 million, which fared better than Publicis’ last attempt at a merger, when a proposed deal with Omnicom collapsed. That subsidiary will now be known as DigitasLBi, and will join Sapient’s former subsidiaries: SapientNitro, Sapient Global Markets and Sapient Government Services in what Publicis is calling a new platform.
The acquisition is expected to be completed sometime early next year, with Publicis set to pay $25 in cash for each share of Sapient. Based on last Friday’s share price, that would give Sapient shareholders a 44 percent premium.
Sapient began as a consultant for IT firms in 1990, but derives the majority of its nearly $1.4 billion current revenue as a result of its evolution into a marketing and ad agency. The company has offices in 37 cities that has nearly 12,000 employees across the world, including 640 in Boston.
Since 2009, Sapient has acquired a number of firms, most notably New York-based Nitro, which was renamed the aforementioned SapientNitro following the merger of the two companies’ staffs. Other acquisitions included design studio Second Story, consumer research firm Iota, marketing analytics company (m)Phasize, and La Comunidad an ad agency geared toward Latino demographics.