Publicis Groupe has agreed to acquire Rosetta, taking the largest privately owned digital agency off the table. The purchase price is $575 million in cash, plus potential deferred payments dependent on the agency's future performance.
“We paid 13.7 times ebitda for Razorfish while we are paying 12.5 times for Rosetta,” he said. “So yes, if we look at pure revenue, it is more expensive; no, if we look at pure ebitda. If you make a balance of both we are paying at the same price.”
Publicis will pay an additional earn-out bonus to Rosetta’s management after three years if it exceeds certain revenue targets – which were not disclosed – without harming its profitability.
Rosetta's health-care expertise was likely attractive to Publicis. It shares a client in Johnson & Johnson, for which Razorfish does corporate brand and other marketing work.
Mr. Kuenne opened Rosetta's doors in 1998 after having spent a decade in the marketing department at J&J, leading the Band-Aid and Tylenol brands business. His subsequent work as a partner at First Manhattan Consulting Group, where he led its retail marketing practice, has helped to reel in the agency's smattering of retail clients, such as Hallmark, Crane & Co., Things Remembered and Sunglass Hut. Mr. Kuenne will continue to lead the agency, reporting to Jean-Yves Naouri, chief operating officer of Publicis Groupe.
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