Tech Dealmaker Awards

Digitas Inc. has made its way from Downtown Crossing to China, as a result of its $1.3 billion acquisition by French advertising company Publicis Groupe SA.

The offer price paid by Publicis for local interactive marketing company Digitas Inc. represents a premium of 23.5 percent over the stock market price of Digitas Inc. on December 19 and 29.1 percent relative to the average price over the prior three months.

Publicis agreed to pay Digitas shareholders $13.50 for each Digitas share, in a transaction valued at $1.3 billion. The transaction received the unanimous approval of the boards of directors of the two companies.

Since the deal, Publicis has also bought Communication Central Group, a China-based ad agency, and rebranded it as Digitas Greater China, according to the company website.

Publicis Groupe’s newly acquired unit is a large interactive ad agency in China, the companies said Tuesday.

The Digitas acquisition was expected to be accretive for Publicis on an operating margin (EBITDA) per share basis by approximately 4 percent in 2007 and by about 6 percent in 2008, and accretive on a fully diluted EPS basis from 2008 onward.

“We believe this transaction provides substantial value to our shareholders as well as strategic advantages for the combined companies,” said Digitas CEO David Kenney. “By joining Publicis Groupe, we are bringing together key assets and strengths in order to capture a larger share of a sector which is expanding dramatically.”

— Bridget Botelho is a freelance writer in Providence, R.I.

Category

Top Software/Services M&A Deals Sell Side

The Deal

Publicis Groupe SA bought Digitas for $1.3 billion. Closed on Dec. 20, 2006.

Key Executives

David Kenny, chairman and CEO, Digitas; Jim Rossman, COO, Digitas; Joe Tomasulo, CFO, Digitas.

Deal advisers

Legal: Goodwin Procter LLP; Covington & Burling; Morris, Nichols, Arsht & Tunnell; Shearman & Sterling LLP; Wachtell, Lipton, Rosen & Katz.
Financial: Bear, Stearns & Co. Inc.; Citigroup CIB; Messier Partners, LLC.

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