Publicis Groupe SA will acquire digital marketing agency Razorfish from Microsoft Corp. The transaction is valued at roughly $530 million, and will be paid out in a combination of cash and Publicis Groupe treasury shares. The transaction is expected to close during the fourth quarter of 2009.
In addition, the parties announced they have signed a strategic alliance agreement that will become effective at the closing of the transaction. Under the terms of the agreement, Publicis Groupe media clients will be able to purchase display and search advertising from Microsoft over the five-year term of the agreement on favorable terms, in exchange for certain minimum guaranteed aggregate purchase levels.
The agreement also provides that Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, and contains a commitment by Microsoft to spend a minimum amount for those services each year during the term of the agreement.
Razorfish will continue to operate under its brand name and be organizationally part of VivaKi, the Publicis Groupe entity created in June 2008 to leverage the combined scale of the autonomous operations of Digitas, Starcom MediaVest Group, Denuo, and ZenithOptimedia
Razorfish’s management team, led by CEO Bob Lord, will remain unchanged, according to a statement from Publicis and Microsoft.
“When we complete this transaction, approximately a quarter of our annual revenues will come from digital communications,” Maurice Levy, chairman and CEO of Publicis Groupe said in a statement.
“We are grateful for the contributions Razorfish has made to our online advertising business since joining the company as a part of the aQuantive acquisition in 2007, and are pleased that they have found a new long-term home with Publicis Groupe,” Steve Ballmer, Microsoft’s CEO, said in a statement.
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