Omnicom has agreed to acquire Flywheel Digital, the digital commerce business of Ascential, for a net cash purchase price of approximately $835 million. For the 12 months through June, Flywheel had revenue of about $300 million.
Flywheel’s services help brands sell goods across hundreds of digital marketplaces, such as Amazon, Walmart, and Alibaba.
Flywheel will operate as a practice area within Omnicom and will be led by Duncan Painter who is joining Omnicom from his current post as CEO of Ascential. He will be succeeded at Ascential by Philip Thomas, who has been running the company’s intelligence and events units.
John Wren, chairman and CEO of Omnicom stated, “E-commerce sales worldwide are set to increase by 50%, reaching about $7 trillion dollars by 2025. The acquisition of Flywheel significantly broadens our reach and influence in the rapidly expanding digital commerce and retail media sectors, two of the fastest-growing parts of the industry. Together, we will seamlessly integrate our offerings across retail and brand media, digital and in-store commerce, and CRM, ultimately delivering superior results for our clients.”
The acquisition follows the summary dismissal of a lawsuit earlier this year brought by Compass Marketing alleging that Flywheel and some of its founders (who previously worked at Compass) stole trade secrets and engaged in fraud and other illegal acts that harmed its business. Ascential was also named a defendant.
Flywheel, started in 2014, has a workforce of more than 2,000 employees and provides services in retail commerce operations, media execution, and market intelligence to over 4,500 brands.
Flywheel Commerce Cloud’s product and transaction data will be connected to Omni’s audience and behavioral data to provide unmatched insights and analytics.
Painter stated, “By connecting Flywheel Commerce Cloud’s product and transaction data with Omni’s audience and behavioral data, we are poised to offer an end-to-end set of services that outpaces the competition. We aim to empower our clients to automate, optimize, and measure their digital commerce and media spend within an increasingly complex marketplace.”
The acquisition is expected to close in the first quarter of 2024 and is subject to Ascential shareholder approval, regulatory approvals, and certain closing conditions.
Separately, Ascential confirmed that SaaS media buying platform Hudson MX is being prepped for sale. Ascential has a 36.5% stake in the company and said that Omnicom has “confirmed its participation in the sale process for Hudson.” Further detail was not available at deadline.