When U.S. marketing services giant Omnicom Group and French rival Publicis Groupe announced the biggest advertising merger in history this July, they did so with a predictable barrage of publicity. The CEOs of both companies, Omnicom’s John Wren and Maurice Lévy of Publicis, shook hands on the $17.3 billion deal during a news conference on the rooftop of Publicis’s Paris headquarters, which overlooks the Arc de Triomphe.
But the transaction stayed out of the public eye until that event, an outcome that had much to do with Geoffrey Austin, a managing director in the London office of boutique investment bank Moelis & Co. In March, Randall Weisenburger, CFO of New York–based Omnicom, called his old contact Austin with a proposal: Omnicom wanted to evaluate a merger with Publicis, and Weisenburger needed complete discretion.
Structured as an all-share transaction, the deal was sensitive to any movement in the stock price of either company. “Secrecy was absolutely essential, and we were the only adviser to work on this for some time,” says Austin, 48. “Even when the circle was broadened, we managed to keep everything completely confidential, which was quite an achievement for a deal of this size.”
The pending merger has helped raise Moelis’s profile. Year to date through late September, the New York–based bank held 12th place for global announced M&A deal volume, with $100.6 billion, according to Dealogic. That’s a 61 percent increase over 2012, when it finished 22nd, with $62.4 billion.
Omnicom-Publicis was also a personal triumph for media expert Austin, who has always worked in London and first met Weisenburger while advising U.K. advertising agency Abbott Mead Vickers on its £346 million ($571 million) sale to Omnicom in 1998. At the time, Austin was an M&A banker at former U.K. merchant bank Hambros, where he spent a decade after earning a chemistry degree from the University of Oxford and completing the London Business School’s corporate finance program. (Paris-based Société Générale bought Hambros in 1998.) “My specialism in media happened by accident,” Austin recalls. “Hambros had a number of clients in the sector, and its ethos of independent advice enabled me to start building relationships that still endure, such as Omnicom.”
In 2001, Austin moved to Deutsche Bank as a deal specialist in the media sector. There his many transactions included advising the private equity consortium that bought Dutch publisher Verenigde Nederlandse Uitgeverijen (now Nielsen Holdings) for $11 billion in 2006 and London-based market research firm Taylor Nelson Sofres on its $1.95 billion acquisition by U.K. advertising and public relations giant WPP Group in 2008. Austin rose to become global head of media at Deutsche before Moelis recruited him in 2010.
Moelis was founded in 2007 by Kenneth Moelis, former head of UBS’s U.S. investment banking business, who saw an opportunity to launch an independent firm focused on advice after the credit bubble burst, undermining the advantage held by integrated banks that had used their balance sheets to offer M&A financing. “I’ve returned to my roots, although Moelis has a global scale that Hambros and other U.K. merchant banks never had,” Austin says of his firm, whose operations in Asia, Europe, the Middle East and the U.S. give it an international presence that is essential as the M&A market becomes more cross-border. “It’s not the case that independent advisers are creating a new advisory landscape, but more a return to where banking used to be before the credit boom, when the market was divided between advisory-led banks on the one hand and financing banks on the other.”
Slated for regulatory and shareholder approval in the first quarter of 2014, the Omnicom-Publicis tie-up will create a $35 billion advertising giant, the world’s largest. Rothschild represented Publicis; because no financing was required, neither party needed the services of a big investment bank, and going with boutique firms helped ensure secrecy. Lévy and Wren will be co-CEOs of the new Publicis Omnicom Group for the first 30 months, after which the latter will take over as sole CEO and the former will become nonexecutive chairman.
Such deals require months of preparation, and Austin spent weeks traveling between New York and London. In his off-hours he keeps a low profile, devoting as much time as possible to his wife and two children. He also serves as president of the Oriel Society, the alumni group for his former college at Oxford, and does fundraising for the National Society for the Prevention of Cruelty to Children.
Omnicom-Publicis signals that Europe’s M&A market is starting to rebound after a long malaise. With the euro zone crisis apparently under control and financing available at favorable rates through the debt and equity markets, the stars are now aligned for a potential deal boom. “M&A bankers have been saying that for several years,” Austin notes. “What has been lacking is confidence, but that is returning now.” • •
