Japanese holding company Dentsu Aegis Network will acquire a majority stake in Maryland-based Merkle – a CRM and performance marketing specialist – and one of the largest independent digital agencies.
It did $436 million in revenue in 2015, a 14% increase over the year prior.
While terms were not disclosed, the deal values Merkle at about $1.5 billion, sources tell AdExchanger.
“Merkle brings a powerful range of data led, fully addressable and real time capabilities,” Jerry Buhlmann, CEO of Dentsu Aegis, said in a statement.
The deal expands Dentsu Aegis’s US presence, where Merkle operates 16 offices. The digital agency also has 650 clients globally.
Merkle will complement Dentsu’s media, performance, content and brand commerce businesses, the companies said. Dentsu sees “significant revenue growth potential” in Merkle.
It’s too early to tell where Merkle will fall on Dentsu’s organizational chart, but there’s bound to be crossover with some of its existing agencies.
Dentsu-owned Isobar, for instance, has 4,000 people focusing on digital and mobile while media agency Carat has about 9,000 people.
But Merkle will reinforce Dentsu’s ties to big media and ad tech partners like Facebook and Google, because it’s a close partner of both.
For instance, it had early access to products like Facebook’s Atlas and Google’s cross-device measurement solution. Merkle’s early entry into combining CRM and paid media made it a convenient partner, and the agency claims to manage 3.7 billion customer records.
“Through this process, I’ve spent a lot of time with Dentsu Aegis Network’s leadership team,” Merkle chairman and CEO David Williams added, in a statement. “Their vision, ambition and perspective on the people-based marketing opportunity align with ours at Merkle.”
Meanwhile, Merkle hopes to use Dentsu Aegis to grow internationally, which it has done on its own lately. It partnered with Chinese search leader Baidu last fall, and has about 400 people on the ground in China.
Merkle also expanded into advanced analytics and media recently, beyond its core focus on database marketing services.
Prior to the acquisition, Merkle was the acquisitive one, snapping up search and mobile capabilities by buying agencies like RKG, 5th Finger and IMPAQT. It gained advanced analytics via Pointmarc and added digital and data services in new territories via a trio of UK-based acquisitions.
Merkle also hired a handful of key digital agency execs to help ramp up its agency and programmatic practice areas over the last two years.
VivaKi vet Mac Delaney joined as head of programmatic last year while Resolution Media’s Gerry Bavaro became head of Merkle’s enterprise solutions, and Razorfish heavyweight Michael Komasinksi took on operations for Merkle’s agency services division.
