Publicis Groupe completes transformation to become industry leader in delivering personalised experiences at scale with Epsilon acquisition

Publicis Groupe today announced the completion of the acquisition of data-driven marketing company, Epsilon, from Alliance Data Systems Corporation, at a net value of US$3.95 billion/£3.13 billion after tax step-up, implying an 8.2 times Adjusted EBITDA multiple.

Based on pro-forma 2018 numbers, the transaction is 12.5 percent accretive to headline EPS and 18.3 percent to Free Cash Flow, excluding any transaction-related synergies.

Since the signing was first announced, many meetings between the Publicis Groupe and Epsilon teams have taken place, laying the foundations of the integration, based on three key principles.

Firstly, Epsilon will become the unique data-tech platform of the group, to deliver personalisation at scale. Its expertise in onboarding, enriching and activating clients’ first party data, its unique data sets and its vertical expertise in the Auto sector will be placed at the core of the Groupe. The very successful Publicis PeopleCloud platform and related activities will be folded into Epsilon. It will be run by its current CEO Bryan Kennedy, who will join the Groupe Executive Committee and report directly to Arthur Sadoun. Synergies will be created by combining Epsilon’s creative agency businesses with Publicis Communications North America, while CJ Affiliate will be aligned with Publicis Media to leverage its growth potential.

Also, the integration of Epsilon will accelerate the seamless implementation of the Power of One for the benefit of our clients. Publicis Communications will leverage Epsilon’s customer insights to improve ideation and build more relevant campaigns, and will power Epsilon’s Dynamic Creative Engine to adapt to real-time consumer context; Publicis Media’s billions of touchpoints will be connected with Epsilon’s data sets to provide superior intelligence to build consumer IDs, segment audiences and maximise media buying ROI; Publicis Sapient will gain access to deep proprietary customer insights to optimise their clients’ organisation and business model; And Publicis Health will partner with Epsilon’s health practice to deliver outcomes-based measurement and optimisation across strategic, creative and media engagements.

Finally, every client will be able to access Epsilon through their Groupe Client Leaders. This will be effective immediately in the US and will ramp up internationally in the months to come. The integration plan is focused on unlocking growth: 6 strategic workstreams have been defined, to address subjects ranging from the definition of ‘a go to market’ approach to lead the change in the industry, to how the group is able to leverage Epsilon’s incredibly talented teams of engineers and data experts in India with its own Publicis Sapient-led expertise in the region. All other integration topics including data privacy, real estate, support functions or shared services are covered by 19 operational task forces.

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