Aegis Group has completed the sale of its research arm Synovate to rival market research firm Ipsos for approximately $834 million.
That figure is about $6 million more than the price initially announced following adjustments for the levels of cash and debt in Synovate at the date of completion of the sale, the company stated.
The closing of the deal leaves Aegis as a pure-play media-agency entity and investors signaled their approval Wednesday, driving the stock up $7 or 3% to $213 per share on the London Stock Exchange. While that’s a nice gain, it’s not the kind of huge run-up usually associated with a company in play.
There has been speculation that one of the bigger holding companies might swoop in with an offer to acquire the company once the Synovate deal was done, but so far, no real evidence of such a move has surfaced.
The company indicated that it would use the proceeds of the sale for both acquisitions and a special dividend to shareholders who will receive a total of $315 million.
"The disposal of Synovate is a transformational moment for Aegis Group,” stated company CEO Jerry Buhlmann. “This is the largest structural change in our history and leaves the core business perfectly positioned to take advantage of today's converging media environment.”
Last month at the Goldman Sachs media conference in New York, Buhlmann said that by selling Synovate the company was basically trading a "low-growth, low-margin business" for media agencies that will perform better and be more synergistic with the company's core offering.
The company has already spent about $100 million on 12 acquisitions this year, the latest being a pair of Swedish customer-relationship marketing firms that Aegis confirmed it had acquired last week. It has targeted an additional 50 to 60 potential "small to medium-sized" acquisitions, primarily in the top 20 global markets, that would add to the company's scale. Aegis is focused on acquiring faster-growing digital companies, such as those in the social and mobile sectors.
Aegis said it would go into further detail about its acquisition strategy during a day-long meeting with investors and analysts set for Nov. 2.