A Pure-Play Aegis Plans To Use Cash To Acquire, Not Sell

Aegis' spin-off of marketing and media research division Synovate to French research company Ipsos for about $859 million gives a bounty of cash that the pure-play media services agency holding company says it will use to sure up its financial stability and also become the acquirer, not the target of other agencies (see related story in today's MediaDailyNews.

While the Aegis board said it will use about $327 million of the proceeds from the Synovate sale to pay a "special" cash dividend to Aegis shareholders, it said the balance would be used to "invest in value-enhancing acquisitions." In a statement, Aegis' board did not specify what businesses it would pursue, but said they would be the type that "provide scale, in-fill and innovation, with a specific focus on fast-growing regions and digital businesses." In other words, the cash-rich, pared down Aegis will be going after the same kinds of businesses that the other major agency holding companies - including its perceived suitors Publicis and WPP - are going after.

No timetable was put on a closing of the Synovate deal, but Aegis said it would include all of its current research assets with the exception of Aztec, the scanner data services business, which will continue to operate separately from Aegis Media.

The spin-off of Synovate, meanwhile, creates some interesting scenarios for the marketing and media research field. While the deal is not significant enough to alter the landscape of the major global research companies, it could add impetus to other deals. Particularly interesting is a deal the world's largest marketing and media research company, Nielsen, struck with WPP's Kantar unit, to license digital set-top data, a potential Achilles heel for Nielsen's sample-based measurement systems.

Nielsen and WPP have been strange bedfellows, and both partners and rivals in the research business in recent years, and WPP chief Martin Sorrell has said he planned to expand the agency holding company's research portfolio in the future.

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