Dick Costolo, Maurice Levy

Nurun sold to Publicis for $125 Million

Deal fits with Publicis goal to grow in digital while Quebecor focuses on telecom

Maurice Lévy has gone shopping again and found his latest acquisition in Montreal.

Lévy’s Paris-based holding company Publicis Groupe has bought Nurun from Quebecor for $125 million. Quebecor is believed to have been shopping the subsidiary since at least the start of the year.

Nurun was founded in 2000 and evolved to become a digital agency and IT consulting operation with more than 1,100 employees in 11 offices worldwide. In its 2013 financial review, Quebecor reported $14.4 million in profit (a 46.9% increase) for the wholly owned subsidiary on $139.2 million in revenue (a 4.3% decrease).

According to a Publicis release announcing the deal, Nurun now specializes in design research, digital products, service design, transactional platforms, user interfaces and post-PC ecosystems. Clients include Adidas, L’Oréal, Videotron, LVMH, SNCF, Pernod-Ricard, The Home Depot, Walmart, Sony, Google, LeapFrog and Tesla Motors.

After the stunning unraveling of an Omnicom and Publicis merger earlier this year, industry experts predicted Lévy would look to grow Publicis through acquisition.

“The acquisition of Nurun is another step forward in strengthening our world-class digital operations,” said Lévy, chairman and CEO of Publicis Groupe, in the release. “Nurun’s expertise, based on a combination of design and new technologies, will not only bring widely-recognized talent and capabilities to our clients, but also strengthen Publicis Groupe’s digital global presence.”

While the deal is a good fit for Publicis, unloading the communications brand also jives with Quebecor’s current focus on becoming a national telecommunications player with a larger presence outside Quebec, particularly in wireless.

“This decision is consistent with our desire to focus all our activities on the four lines of business that define our mission of being the Canadian leader in telecommunications, news media and entertainment and culture,” said Pierre Dion, president and CEO of Quebecor. Nurun’s operations, he said, “no longer fit with our core businesses.”

Quebecor’s Videotron cable and internet unit started competing in wireless in 2010 but, as of the end of the second quarter, it had only about 551,300 mobile subscribers. By comparison, Toronto-based Wind Mobile had about 735,000 in three provinces and each of the big three had at least 7.7 million.

Quebecor bought wireless spectrum earlier this year in Ontario, Alberta and British Columbia for $233 million, opening an opportunity for it to expand beyond its provincial borders. Some analysts have said Videotron may work with other carriers, or buy Wind Mobile, but no deals have been announced.

The deal also comes with another large Canadian agency brand still on the market.

Mill Road Capital has been looking for a buyer for the North American assets of Vision7, the parent company of Cossette. Vision7 includes some operations in Europe though most of its 1,100 employees working for brands such as Cossette, Dare, Citizen Relations and Jungle Media, are in North America.

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