Dentsu To Acquire Aegis For $3.85 Bil, Gives It A Digital 'Multiple'

by Joe Mandese, Jul 12, 2012, 8:02 AM

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Aegis Group, the London-based agency holding company that began as a Paris-based media-buying service is about to become part of a Tokyo-based marketing services giant that will be one of the largest in the world. In a surprise deal announced during the wee hours, the board and key managers of Aegis agreed to be acquired by Dentsu in an offer valued at $3.85 billion.

The deal, which is expected to go through, represents a 48% premium over the value of Aegis’ shares, would mark an end to incessant speculation about the future of the ad industry’s 6^th largest holding company (Aegis), which after merging with the 5^th (Dentsu) would approach the scale of its 4^th (Interpublic). For the past several years, speculation had focused on Aegis merging with the 7^th, Paris-based Havas, because the two holding companies have a common major shareholder, French industrialist Vincent Bollore.

The companies described the offer as “good news” for Aegis’ clients, employees and shareholders, and noted that the valuation is more in line with the kind of multiples paid recently for digital media businesses – the darlings of the industry’s M&A marketplace – than those for traditional ad agencies or media companies.

The deal also comes as a feeding frenzy is mounting for big, scalable digital advertising agency organizations, following WPP’s recent acquisition of San Francisco-based AKQA, and a push by the biggest agency holding companies to scale for digital domination. The companies emphasized that the merger would create a “global leader in digital,” combining assets like Aegis’ Isobar network with key Dentsu digital assets such as 360i.

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