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Aegis Group Acquires Digital Consultancy Co Communicate 2

Media and digital communications group Aegis Group plc has entered into an agreement to acquire a digital performance marketing and search agency Communicate 2, through its digital performance agency iProspect.

The Deal: While the financial details of the acquisition were not disclosed, a company statement suggests that the gross assets of Communicate 2 were Rs 12.99 croresas of March 31, 2012. That being said, a Business Standard report suggests that Aegis acquired Communicate 2 for $10 million (Rs 55 crores). It also states that Aegis will currently buy out the shares from all non-promoters who currently hold 30% stake in Communicate 2 and it will buy promoter’s stake including Vivek Bhargava’s stake in an earn-out structure, although there is currently no information on the structure.

Communicate 2 founded in 1997, has offices in Mumbai, Delhi and Pune and employs over 130 employees. It offers various agency services including search engine optimisation, search engine marketing, contextual advertising, and creating search strategies around social media and lead generation. Some of its clients include local businesses like Tata Consultancy Services, Cleartrip, ICICI Lombard and international businesses like Travelocity, Aviva Insurance and American Express.

Second Time Lucky?

Back in 2008, Aegis Group had announced its plans to acquire a stake in Communicate 2. It had stated that it will integrate Communicate 2’s search marketing service in its media agency Carat and improve its digital agency Isobar’s search marketing capabilities in India, however it looks like the deal never went through.

What Next?

Communicate 2 will be merged into iProspect India, in a bid to strengthen its network in Indian cities and provide additional service capabilities to its clients. The combined entity will be called iProspectCommunicate 2 and will be headed by Vivek Bhargava, CEO of Communicate 2. Bhargava has been invited to join the Aegis Media India Executive Council.

Similar developments

This is the fourth such Indian digital agency acquisition in the recent months after Publicis Groupe acquired a performance marketing firm Resultrix, earlier in the month and a digital marketing and web development firm Indigo Consulting in April 2012. Global advertising major WPP Group had also recently acquired a majority 51% stake in Hungama Digital Services Private Limited via its wholly owned agency JWT Singapore.

Dentsu-Aegis Acquisition: In July 2012, Japanese advertising major Dentsu, had acquired the London headquartered Aegis Group, for approximately GBP 3.16 billion ($4.89 billion approx), as part of a cash deal, making it a wholly owned subsidiary. Through this acquisition, Dentsu got Aegis’ digital marketing business Isobar, and digital performance agency with a focus on search engine marketing, iProspect.

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