Publicis Groupe has agreed to buy independent digital shop LBi for $540 million, the companies confirmed Thursday. Publicis said it would pay LBi shareholders close to a 40% premium over the price of LBi's publicly traded shares.
LBi, based in Amsterdam, confirmed talking to unnamed parties this summer about a potential sale. However, it was Omnicom that surfaced in press reports as the likely buyer -- not Publicis.
LBi clients include Lloyds TSB, Volvo, Johnson & Johnson, Coca-Cola, Carlsberg and Ikea.
The proposed purchase extends the latest round of agency consolidation as the major holding companies continue to bulk up their digital offerings. Earlier this year, WPP purchased independent digital agency AKQA."The acquisition of LBi is another step forward in further strengthening our digital operations," stated Maurice Lévy, chairman and chief executive officer of Publicis Groupe. “Within the global advertising landscape, LBi is a well-known” provider of digital services including creative, expertise in technology, strategy and social media, he said.
“The integration of LBi will further enhance our capabilities and through a wider pool of resources and talent, help deliver innovative and best-in-class services to our clients, which is our relentless focus," Levy added. "Furthermore, this acquisition has a positive impact on our EPS [earnings per share] in the first year post-acquisition.
The acquisition comes amid a period of management churn within Publicis Groupe’s digital ranks, including Laura Lang, who oversaw Digitas and other Publicis digital brands that left to run Time Inc. Also, Curt Hecht, head of the VivaKi Nerve Center, left to join David Kenny, CEO of the Weather Channel. Kenny was the CEO of Razorfish when Publicis bought that shop several years ago and led Publicis Groupe’s digital strategy for several years before departing in 2010.
“We are thrilled at the prospect of joining Publicis Groupe and are convinced this transaction not only provides highly attractive value to our shareholders, but equally to our clients, staff and partners,” stated Luke Taylor, Chief Executive Officer of LBi.
Publicis has the right to cancel the deal if shareholders owning at least 90% of outstanding LBi stock do not tender their shares, the companies said. Also, the agreement can be terminated if LBi gets a better offer before closing, in which case Publicis would have a chance to match. The companies said the deal is subject to antitrust approval.