Specifically, the agency holding groups.
Publicis may have denied a report from Campaign that it has held talks with a private equity investor about a possible deal but conversations like this are par for the course right now.
“These conversations are an ordinary course of business for big companies that find themselves in the positions the holding groups do now,” said Jim Houghton, partner at M&A advisors Waypoint.
They may be hulking, legacy businesses, but the agency holding groups represent something that’s like catnip to private equity investors an arbitrage opportunity.
Whether its Publicis or IPG, these are businesses private equity investors can buy relatively cheaply and then, after steering them through a transition of intense cash flow and margin improvement, sell up. It’s the classic private equity move to juice profits on undervalued assets.