Dentsu Inc. Agrees to Acquire Majority Stake in Markle Corp., the Largest Independent Data Marketing Company in the U.S.

Dentsu Inc. Reaches Agreement to Acquire Majority Stake in Markle, Inc.
Agrees to Acquire Majority Stake in Markle Corporation
Strategic Investment in a High-Growth Area to Build Foundation for Further Dentsu Group Growth ―

Dentsu Inc. (Headquarters: Minato-ku, Tokyo; President and CEO: Nao Ishii; Capital: ¥74,609.81 million) of Dentsu Inc. has reached an agreement with the shareholders of Merkle Group Inc. (Headquarters: Maryland, Chairman & CEO: David Williams, hereinafter "Merkle"), one of the largest independent data marketing companies in the U.S., to acquire a majority stake in the company.

Merkle's predecessor was established in 1971 and was subsequently acquired by its current management in 1988, leading to its present form. During this period, the company evolved from local data processing to first-party data (customer data) analysis. By honing its expertise and know-how, it grew into a global player with its own proprietary technology platform. Today, Markle serves over 650 of the world's leading companies. It has access to more than 150 marketing databases and manages over 3.7 billion pieces of first-party data.

Merkle's service offerings span a wide range, including business and customer strategy development, cloud-based data & CRM management, analytics & insights, leveraging optimal channels/media/technology/platforms, creative and content production, and campaign planning and execution. The company's strength lies in its ability to integrate these services to enhance consumer engagement and maximize marketing ROI.

Supporting this integrated service is a workforce of approximately 3,400 employees, including over 1,000 technology professionals and more than 500 analytics professionals. Furthermore, partnerships with major cloud software companies are enhancing the company's capabilities by strengthening data-driven marketing.

This equity acquisition represents a significant investment that will support the further growth of our group in several key ways. Specifically: ① It enables us to gain scale, expertise, and new capabilities in the increasingly critical domain of data and technology-driven solutions; ② Consequently, it allows us to assume an even stronger role as a strategic partner for client companies; ③ It creates a complementary relationship with our existing services and network, both strategically and geopolitically, leading to synergy creation; ④ It allows us to acquire a capable management team and a large pool of specialized talent all at once.

In the "Global CRM/Direct Marketing Networks" ranking published by Ad Age, Markle ranks 9th globally and 5th in the U.S. (2015). Furthermore, the Forrester Wave reports (Customer Insight Services domain) evaluate Markle as a "Global Leader" in both the Customer Engagement Strategy category and the Marketing Technology/Data & Analytics category.

Following the acquisition, we ^{will position} Markle ^{as a} new global ^{network brand*} within our group. By collaborating with our group companies worldwide and global platform companies, we will strive to create synergies and develop and provide even higher value-added services.

While an agreement has been reached to acquire a majority stake, the completion of the acquisition is expected in late September 2016 due to the time required for necessary procedures.

While the impact of this transaction on Dentsu's consolidated results for the fiscal year ending December 2016 is expected to be minimal, any matters requiring disclosure will be promptly announced.

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* Dentsu Inc. Aegis Network (London), which oversees Dentsu Inc.'s overseas operations, currently conducts business globally centered around nine global network brands. These nine brands are Carat, Dentsu (Dentsu Brand Agencies), Dentsu media, iProspect, Isobar, mcgarrybowen, MKTG, Posterscope, and Vizeum.

 

【Overview of Merkle】
Company Name: Merkle Group Inc.
Headquarters: Columbia, Howard County, Maryland, USA
Operates 16 offices across the United States, with additional offices in London and Bristol, UK; Barcelona, Spain; and Shanghai and Nanjing, China
Founded: Predecessor company established in 1971. Acquired by current management in 1988 and continues to operate today
Revenue: $436 million USD (approx. ¥44.6 billion) (Fiscal Year Ended December 2015)
Representative: David Williams (Chairman & CEO)
Number of Employees: Approximately 3,400
Business Description: Provides marketing solutions utilizing data and technology