Publicis to buy 20 percent of digital advertising group Matomy

PARIS (Reuters) - Publicis (PUBP.PA) has agreed to buy 20 percent of Israel-based digital advertising company Matomy Media Group (MTMY.L) for 227 pence per share, and has an option to purchase another 4.9 percent.

Matomy's shares closed at 238 pence on Friday, valuing Publicis' 20 percent stake at around 42.6 million pounds.

As major companies shift more of their spending to online marketing, advertising agencies like Publicis and its larger rivals WPP (WPP.L) and Omnicom (OMC.N) have been snapping up start-ups to gain technological know-how.

The deal also shows how Publicis is seeking to boost growth after the failure in May of its mega-merger with Omnicom (OMC.N) hurt second-quarter performance.

Matomy, which counts American Express and HSBC among its clients, specializes in so-called performance-based advertising that allows big companies to track the effectiveness of their online marketing. It only earns a fee from advertisers when it achieves certain pre-defined measurable results, such as sales or mobile app installations.

Matomy made its stock market debut on the London Stock Exchange in July, with a listing price of 227 pence per share. Its shares were 233.9 pence at 0743 GMT (08:43 a.m. BST), while shares of Publicis were down 0.8 percent at 51 euros.

Matomy posted 117.34 million pounds in sales last year, and a net profit of 4.44 million pounds. In the first half of this year, sales grew 9.5 percent to $107.6 million (66.77 million pounds).

"Matomy is fuelled by the innovators and technology experts of Israel and has quickly risen to the top of this important market by creating a world leading, state of the art platform," said Publicis Chief Executive Maurice Levy in a statement.

French bank Rothschild advised Matomy's core shareholders on the sale.

(Reporting by Leila Abboud; Editing by Alexandria Sage and Susan Thomas)