• by Joe Mandese  @mp_joemandese, October 30, 2023

As part of a surprise announcement that Omnicom has acquired the digital commerce operations of Cannes Lions owner Ascential PLC -- as well as its former CEO Duncan Painter -- the agency holding company also is participating in the sale of struggling agency tech startup Hudson MX, the companies announced.

Details of the Hudson sale could not be ascertained at presstime, other than a cryptic reference that Ascential had initiated it, and that Omnicom "confirmed its participation in the sale process for Hudson."

An Omnicom spokesperson clarified that Omnicom has "committed to participating in looking at [Hudson MX] when the sale process begins," adding: "There is no commitment for us to do anything other than participate in the sale process."

Hudson, an agency media-buying technology developer that has spent the past half dozen years trying to compete with the ad industry's long-dominant tech supplier, Mediaocean, to date has mainly been backed by Ascential investments and loans, and famously included high-profile early round investors such as MediaLink's Michael Kassan and his son Alexander Kassan, as well as retired GroupM chief Irwin Gotlieb.

Earlier this year, Ascential announced a restructuring of its investment in Hudson, including the addition of a mysterious private equity investor -- MT II Holdings -- that gave Ascential a path to ultimately control Hudson.

The move followed hundreds of millions of dollars in burned capital investments and Hudson's failure to sign any major agency holding company as an enterprise client, although at least two -- Interpublic and Horizon Media -- were believe to still be open to discussions about moving their media-buying systems from Mediaocean to Hudson.

Mediaocean also previously made an offer to acquire Hudson, which Ascential management passed on.

Earlier this year, Ascential CEO Duncan Painter also moved over to CEO of Flywheel.

Last month, Sky News reported that MediaLink was part of a private equity group that had made a bid to acquire the Cannes Lions from Ascential, though there have been no new developments reported on that.

Prior to today's sale of its digital commerce division to Omnicom, Ascential had been discussing a plan to combine Flywheel with Hudson and other assets and spin it off as a new publicly traded company in the U.S.

Based on the previous restructuring of Hudson, MT II Holding and Ascential became Hudson's preferred shareholders controlling 87.5% of its equity, with the remaining 12.5% in common shares owned by an unspecified group of common shareholders known to include former Hudson CEO JT Batson (now head of the U.S. Soccer Federation), Michael Kassan and Alexander Kassan.

Based on today's announcement of "new arrangements," Ascential and MT II Holdings said they have agreed to initiate a sale process for Hudson, but did not indicate who a suitor might be or why Omnicom is participating in it.

While Ascential has been restructuring other assets in its portfolio, including Flywheel as part of its digital commerce assets sale, an Ascential spokesperson confirmed Hudson was not included as part of the sale of Flywheel and that Ascential currently retains its stake.

"I cannot speak for Omnicom and their reasons for participation. We can't make any further comments at this time," the spokesperson said.

A source knowledgeable about Flywheel's bottom line performance to date described Omnicom's purchase as "a bloody expensive deal for Omnicom: 4x revenue, 40X ebitda."

As part of the deal, Flywheel's Painter is joining Omnicom and will continue to run its operations there.