Mergers and acquisitions

Partners at Green Square, Corporate Finance Advisors to the media and marketing sector, cast their eyes over the latest industry deals and look ahead to the next tranche of acquisitions.

12 October 2012 - 2:08pm | posted by | 0 comments

Is the next big integrated group out there somewhere?

Taptu was acquired by MediaFedTaptu was acquired by MediaFed

As we said last week, we feel that it’s going to be the niche areas that will provide much of the marketing services M&A activity in the coming months – and so it has proved again this week.

In the past fortnight, The Mission Marketing Group plc, a London-based umbrella grouping of seven specialists, has announced the acquisition of creative agency Addiction Worldwide. With offices in London and New York, and clients including household brands such as B&Q, Remington and Voss water, Addiction specialises in digital and social content, and will work closely with fellow Mission member Bray Leino.

In recent months, some commentators have cast doubt on the real value of social media – this is a subject we’ll return to in the near future – but Addiction looks to be a great fit with the Mission group – it has a good reputation and has a decent in-house production facility and strengthens Mission’s integrated offering.

Staying in the UK, Mediafed – a specialist in monetising its clients’ RSS feeds – acquired Taptu at the end of last month. Taptu is an award-winning mobile search and technology company, known for its consumer apps and news aggregation platform. Mediafed’s news reader, which supplies feeds to 125 million consumers from over 1,200 premium publishers across 55 countries including The Guardian and New York Times, allows users to ‘DJ their news’ by mixing and mashing sources and topics into contextual streams and then share them.

Financial details were not disclosed but for a company like Mediafed this seems like a canny acquisition: it gives them both international scale and a presence on the all-important mobile platform (Taptu is available on phones and tablets in over 100 countries, across iOS, Android, BlackBerry, Samsung and mobile Web platforms).

Iris Associates, a Sheffield-based marcomms, design and digital agency has been snapped up by WeAre2020, another (and much larger) Sheffield operation. WeAre2020 (formerly Digital Marketing Group ,or ‘DMG’) specialises in lead generation, customer service, contact centres and consultancy. Buying Iris gives it a foot in the creative and marketing services camp and really strengthens its brand communications proposition in a part of the UK that is currently underserved.

Back in London, Freeform.London’s acquisition of Firebelly, a digital agency that specialises in creative campaigns for entertainment and publishing clients (including Disney, Universal and Lionsgate) is another interesting buy. Freeform started off 20 years ago as a creative print agency but over the past five or six years has been trying to position itself as a fully-integrated operation. Firebelly – which will be fully subsumed into its parent – gives Freeform another string to its bow, and crucially, the new acquisition’s contacts in the entertainment industry will help it grow its fledgling Los Angeles office.

Design consultancy Foolproof, which has offices in London and Norwich, last week went international by buying One to One Global, a Singapore user experience specialist. Obviously this gives Foolproof a toehold in the fast-growing APAC region – One to One’s clients include HSBC, PayPal and Nokia.

Foolproof seems to have big ambitions and an eye toward the long-term future – last year it acquired Flow Interactive, a London-based company that specialises in creating “cohesive user experience” across the web and mobile devices.

What’s interesting about all these acquisitions are that they signal the intent of medium-sized marketing agencies to grow and develop both scale and a wider, more integrated range of offerings. Will one of them be the next big integrated group? Who knows – but we’ll be taking a look at how these growing agencies might affect the UK marketing services landscape soon.

And finally, the big boys are still buying up smaller specialists – only last week Aegis acquired specialist Finnish experiential and events agency Irokeesi Oy, which will work closely with Aegis’ Posterscope out-of-home operation. Irokeesi only had assets of €900,000 in December 2011, but is the market leader in its territory and has a strong client list including Kellogg’s, Mercedes-Benz, Lego and Nestle. It means Aegis can now offer experiential services to its clients. Experiential and events are a growing side of the marketing services industry and offer good margins so we’d give this one the thumbs up (and Aegis’ shares rose on the announcement) – although again, financial details were not disclosed.

Tony Walford is a partner at Green Square, Corprate Finance Advisors to the media and marketing sector.

Be the first to comment on this article: sign in or register.

Have your say

Opinion, blogs and columnists - call them what you like - this is the section where people have something to say. You might agree or you might not - whatever opinion you have make your views known in comments. Views of writers are not necessarily those of The Drum. If you would like to contribute a comment piece, email your idea to opinion@thedrum.com.