Earlier this week integrated marketing and consulting group Jaywing acquired one of the UK’s leading names in search marketing, Epiphany, in a deal worth £18m.
The deal saw the creation of a 600-strong integrated marketing group with offices across the UK in Sheffield, Leeds, London, Ipswich, Swindon, Newbury and also in Sydney, Australia and a combined client list that includes Nestle, EON, Aviva, Carlsberg, Virgin Holidays, Sky, Paul Smith, eBuyer and Agent Provocateur, among many others.
While the 7am announcement by stock market listed agency Jaywing may have caught many in the industry napping, such a strategically important acquisition has been on the cards since Jaywing CEO Martin Boddy disposed of the agency's ecommerce arm, Tryzens, for £6m in October 2013.
So, is this the culmination of a longer term business strategy put in place by CEO Martin Boddy and COO Andy Gardner?
Boddy says: “Andy and I came back into the business two years ago and what we have been trying to do during that time is to refocus the business and really move it into a space where we are using our data analysis specialism to really differentiate our business in the marketplace.
“We made an acquisition last year, Iris Associates, and we divested ourself of Tryzens and the Epiphany acquisition is a really big statement from us in terms of what the direction of this business is, which is really around fusing the data science with highly creative multi-channel marketing. That is the essence of what we want to be as we grow and move forward.”
Interestingly, it was actually a Jaywing clients request for them to organise a pitch to source an SEO agency that really focused their attention on what Epiphany could add to their business and support their ambitions.
“I’ve known Robin (Skidmore) for some while, but one of our clients asked us to organise a pitch to get a new SEO agency and Epiphany were one of the agencies that came in to pitch. It was the client and us on the other side of the table and Epiphany just blew everyone else away. So we experienced what they are capable of at first hand, so to speak.
“The timing was uncanny really. I arranged to meet Robin for a beer with a view to trying to persuade him to sell the business to us and he said ‘funnily enough, we have just started a process’, so it was almost like fate really.”
Speaking hours after the deal was announced earlier this week Epiphany CEO Rob Shaw said that they had indeed begun a process, led by advisor Clarity, to find a partner that would allow them to take their business to the next level. Not surprisingly though, with such a strong agency brand, Epiphany was a prized asset and one which Boddy and his management team had to fight for.
Boddy says: “There were other companies involved in the bidding process, but I don’t know who they were. It was competitive, but we were very keen to be successful. It was a highly competitive process as Epiphany was a highly sought after business, but I think the key thing around it, and the reason they came with us in the end and didn’t go elsewhere was the chemistry between us. There is a really strong chemistry and we share the same view of where the future is going in terms of the ever increasing use of data in marketing in one form or another.
“Another factor is the level of ambition in both businesses. We have put two fast growing businesses together and now we have a great opportunity together. It’s not always all about money; it’s what you can create together and how you can work together.”
So, looking to the future, what how will the two separately branded agencies work?
“We have a number of elements to the business now, we have a consulting element, which is all our data consultancy; our media element, which is very much what Epiphany brings to the party; we have an agency element, which is around brand marketing, digital marketing and customer marketing ; and then we have our contact centre.
“Epiphany will carry on doing what they do so well with Rob running that, Robin will continue building the Shackleton arm of that business and Shane (Quigley) in Australia is taking on a broader role, so he is going to head up product development. With Epiphany we now have access to a lot of online data that we hadn’t previously. Jaywing has the best analytical team in the UK, we have 50 heavyweight statisticians here, so our product development is going to be fuelled by putting the online data together with those guys so we can really innovate in that area. Strategically, that is a very important area for us moving this business forward.”
Being a listed company Jaywing bosses had to keep their intent to acquire another business top secret, so the first things staff and clients knew about it was when the news broke on Tuesday morning at 7am. Despite the surprise, Boddy says the reaction has been wholly positive.
Boddy says: “It came as a very nice surprise to the staff. Being a PLC it is a very close circle of people that you can let know what is going on. We made a public statement when we disposed of Tryzens last year that we were looking to acquire a strategically important business, so in that sense it’s come as no surprise. But I think the fact we have acquired Epiphany has just been fantastic. The buzz around the business is amazing. People are really excited about it. The client reaction has also been really positive. Many of our clients obviously know of Epiphany and the feedback has been really positive.
“Sometimes when you do an acquisition people don’t understand why you have done it. Often they are purely financial, but this deal goes far beyond the financial aspects. It fits strategically and the cultures of the two businesses fit. We have already had several opportunities with clients who have come back and asked us if we can now do this and that for them, so that’s very positive.”
And so, with an agency acquisition in 2012 (Iris Associates), an agency disposal in 2013 (Tryzens) and now the acquisition of Epiphany in 2014, Boddy clearly likes to shake things up, regularly. So, can we expect more acquisitions in the near future?
Boddy says: “We are looking to really focus on bedding this one down first and really get busy working together, working across our clients and maximising the opportunities. Then there is the task of creating the new product development area, which is all around data science and big data and how can get our analysts pointing at that and developing genuinely innovate products from that. Beyond that, we are an ambitious business, so I suppose we will see what happens.”