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Saturday, 25 October 2014

Ipsos agrees £525m takeover of Synovate

FRANCE/UK— Ipsos has agreed a £525m takeover of Synovate, the Aegis-owned market research group.

The deal still requires the approval of Aegis shareholders but Vincent Bolloré, the media services group’s single largest shareholder owning 26.5%, has pledged his support for the sale.

Ipsos described the acquisition as “transformational” and will create the world’s third largest research company by revenue.

Synovate CEO Robert Philpott said: “The offer from Ipsos is a great compliment to the strength of Synovate’s business, our leading research solutions, our people, and all that we have achieved since our inception.”

The deal excludes Synovate Aztec, a retail sales data supplier that was bought for £14.8m in 2005. At this stage it is unclear whether Aegis will retain that company or look to sell it on to a trade buyer strong in this area of business, such as GfK or Nielsen.

Ipsos plans to fund the acquisition of Synovate through a mix of debt financing and a rights offering.

It has been in talks with Aegis since June. The only other possible bidder for Synovate to emerge publicly since then is the private equity group Doughty Hanson, who was reported to be ready to offer up to £600m for the business although Aegis management refused to hold talks while it was in “exclusive” discussions with Ipsos.

Didier Truchot, Ipsos’s co-president, has long admired Synovate, calling it a “a very nice and dynamic organisation” in 2005 amid speculation at the time that the division could be sold off in the wake of an acquisition of its parent company Aegis.

Yesterday that rumour started up again, with press reports saying Aegis itself would become a bid target for rival advertising groups WPP and Publicis once Synovate was sold. Aegis owns the media planning and buying agencies Carat, Isobar and Vizeum.

Update: In a statement, Aegis says it will retain Synovate Aztec – now just Aztec – and run it separate from the rest of its media businesses. Retail sales data isn’t an obvious fit with the rest of the group’s services – and the same is true of Ipsos – so the smart money would be on this part of the business eventually being sold.

Aegis has also said that it will return £200m of the Synovate sale proceeds to shareholders through a special dividend.

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Readers' comments (4)

  • As an aside, this is another chapter in the trend of global consolidation of market research agencies as bigger players swallow the smaller agencies and then merge with others.

    It might mean re-building account relationships, but as a client I can foresee how important it is to lock in a relationship and even commitment from talented people instead of going in for short-term relationships and keep hopping between agencies to go for the best deal or experimenting... because you are now gonna run out of agencies to choose from.

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  • The current joke on why Sir Sorrell didnt pitch for Synovate is that he was waiting for Ipsos to take over
    ... so that he could pitch for the combined business and kill two birds with one stone !!! :-)

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  • With another main player in the research industry gone, the window is open for new agencies to grow faster

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  • First I'd like to wish everyone Happy Holidays, now straight to business. I want to direct this question to Synovate's Robert Philpott, and Ipsos Dider Truchot. I have a close friend working for Synovate in the Jakarta Indonisia office. I'm a service connected disabled veteran. How is this Transformational purchase going to effect her pay grade (as it's a tenth of what your same employee in the U.S. gets? Jackie, HR of Synovate here in New York said she was going to personally check on the cost of living in Jakarta, which is a huge and weathy city. I'm also concerned with her benifits, and change of Management. I've heard nothing from her but dissatisfaction. If you don't treat your employees with the upmost respect, (the bacbone of your company), they will not be as dedicated, and you stand the very real possibility of losing many of your work-force. Best of luck, and looking forward to an answer to these critical issues & questions.
    Regards; David Starkey: CEO of Cyber Salvation

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