Publicis confirms Epsilon’s acquisition for $4.40 billion in cash

Publicis Groupe today confirmed the acquisition of Epsilon, for a cash consideration of $4.40 billion. Epsilon was a subsidiary of Alliance Data Systems Corporation, a US company providing loyalty and marketing services.

Publicis says the acquisition will accelerate the implementation of Publicis’ strategy to become the preferred transformation partner for its clients.

Alliance Data states the sell of Epsilon for $4.4 billion represents an approximate 10X trailing 12-month EBITDA (adjusted) multiple. The transaction was unanimously approved by Alliance Data’s Board of Directors and is expected to close in early Q3 2019, subject to satisfaction of customary closing conditions and receipt of regulatory approvals.

Epsilon is headquartered in the US, and in 2018 generated $1.9 billion of net revenue, 97% in the United States. According to Publicis, Epsilon employs approximately 9,000 employees, including 3,700 data scientists and 2,000 Bangalore-based technology delivery experts.

Here how Publicis will integrate Epsilon:

Creative side: Epsilon assets will bring customer insights to improve ideation and build more relevant campaigns. By powering the Dynamic Creative Engine, Publicis will go one step further to adapt to real time context of customers (who they are, what they do, what they buy).

Media side: the connection between Epsilon’s data sets and Publicis Media’s billions of touchpoints will provide superior intelligence to build consumer IDs, segment audiences and maximize media buying ROI by accurately measuring and optimizing campaigns in real time.

Digital Business Transformation side: Epsilon will allow Publicis to deliver deep proprietary customer insights to further optimize clients’ business model.

Internationalization: Epsilon will benefit from Publicis’ client portfolio and global reach to expand further in the U.S. and overseas.

“Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations. The only response is to deliver personalized experiences at scale.”

Arthur Sadoun, Chairman and CEO of Publicis Groupe

What is Epsilon’s expertise?

  • Onboard client first-party data using Epsilon’s proprietary software suite (CRM, email and loyalty programs) to create a clean, normalized and organized data set.
  • Enrich client’s first-party data with Epsilon proprietary data assets (demographic and contact, behavioral and transactional, online and offline data).
  • Build unique ID customer profiles based on enriched data and Artificial Intelligence for segmentation and analytics.
  • Activate data to deliver personalized multichannel campaigns at scale with measurement and real-time optimization.

“We are thrilled to join the Publicis Groupe family. During extensive discussions with the Publicis leadership team during the recent review process, we found powerful common ground, including shared values and a strong vision for the future of data-driven, digital-first marketing. Our discussions illuminated the unmistakable market opportunity that combining our complementary offerings would represent. I strongly believe that joining Publicis will benefit Epsilon and Conversant’s people and bring great value and new opportunity to the clients we serve.”

Bryan Kennedy, CEO of Epsilon