Quebecor Inc. has sold its digital services division Nurun Inc. to French multinational advertising and public relations giant Publicis Groupe for $125-million.
The Montreal-based company said Tuesday it decided to sell its subsidiary to better focus on its core operations in the telecommunications and media industries.
"We have therefore sold Nurun, a consulting firm specializing in digital innovation, design and technology, since its operations no longer fit with our core businesses,” Quebecor chief executive Pierre Dion said in a statement announcing the closing of the all-cash deal.
The company is still weighing whether to take the wireless business operated by its Videotron division national.
It has said it wants assurances of “fair” wholesale roaming rates – the rates cellular providers pay to roam on their competitors’ networks – before it makes a final decision. The Canadian Radio-television and Telecommunications Commission is holding a public hearing on that issue at the end of September and is expected to release a decision later this year or early next year.
Quebecor owned 58 per cent of Nurun before taking the company private in 2008 after a failed attempt to buy out minority shareholders the year before.
Publicis said in a separate statement that the agency will continue to operate under its existing management, including president and CEO Jacques-Hervé Roubert.
Nurun, which was founded in 2000 and is headquartered in Montreal, has 11 offices and 1,100 employees worldwide. It has done work with high-profile brands including Adidas, L’Oreal and Google.
Its IT consulting services division also does business with the Quebec government, which came into focus during this year’s provincial election campaign after the Journal de Quebec published a report that said Nurun was awarded dozens of government contracts from 2012 to 2013 worth about $13-million.
The Montreal Gazette reported that Quebecor majority shareholder and former CEO Pierre Karl Péladeau was asked at a press conference in March whether the contracts would pose a conflict of interest if he won a seat in the election. Then-Parti Québécois leader Pauline Marois stepped forward and nudged Mr. Péladeau aside to say she would answer the question, the Gazette reported. She said it would not pose a problem, explaining that the rules around awarding government contracts are strict and elected representatives don’t make such decisions.
Nurun reported revenues of $139-million in 2013 and earnings before interest, taxes, depreciation and amortization of $14-million.
Canaccord Genuity analyst Dvai Ghose said the sale price was below the $147-million value he had ascribed to Nurun but said that was offset by the simplification of operations within Quebecor and potential to reduce its debt leverage.