• by Joe Mandese  @mp_joemandese, October 30, 2023

Editor's Note: Ascential and Omnicom spokespersons denied this report and a new story explaining the correction has been published here.

Once its purchase of the digital commerce assets of Ascential plc are completed, Omnicom would be a shareholder of Hudson MX, along with industry figures including Michael Kassan, JT Batson, and majority shareholder MT II Holdings, assuming the agency tech startup isn't sold first.

That explains why Ascential disclosed Omnicom has agreed to participate in the sale of the agency technology startup, according to people familiar with the transaction, who said Ascential’s equity in Hudson MX was included as part of the sale of its digital commercie assets to Omnicom.

While those assets primarily include fast-growing ecommerce platform Flywheel Digital, Ascential also bundled Hudson MX into the offering.

On Oct. 24, Ascential announced the formation of a new single, global Flywheel brand based on the integration of “11 unique Ascential digital commerce brands.”

While Ascential did not disclose what those other assets were, executive familiar with the transaction say Ascential’s equity in Hudson MX was one of them.

Early Monday, Ascential said the board had initiated a sale of Hudson MX, and that Omnicom agreed to participate in it.

At the time of the deal, Ascential owned 36.5% of the equity of Hudson MX, but had an option to increase its equity to 79% of the company.

However, Ascential said it entered “new arrangements” with MT II Holdings in order to ensure it receives “at least the same consideration for its stake in Hudson when the business is sold as it would have done” under its original agreement – about $80 million based on the original option.

According to executives familiar with Omnicom’s purchase of the assets, the holding company acquire Hudson MX, but it’s unclear what the logic of doing that would be, since Hudson MX’s growth would be premised on servicing other agency holding companies, as well.

One likely suitor presumably would be Mediaocean, the dominant supplier of agency media-buying technology, which competes with Hudson MX, and which previously made an offer to buy it.

However, an executive familiar with Hudson MX’s current market position said it’s unlikely Mediaocean would be interested given that Hudson MX has yet to sign a major agency holding company enterprise deal, and is generating only a couple of million dollars annually.

“The only thing that business has of value is a deal with Verizon,” said one knowledgeable executive referring to the fact that Hudson MX currently services Verizon’s in-house media-buying unit, adding, “So maybe Verizon’s agency would be interested in it.”

In September, Verizon named WPP’s Ogilvy unit to handle its consumer marketing account.

A Hudson MX insider says the company has been telling employees that the plan take a combined Flywheel and Hudson MX public changed when Omnicom “came out of nowhere and made a huge offer for Flywheel,” though people familiar with Omnicom’s discussions with Ascential say they’ve been going on at least since last summer.