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.
Last week we wrote about the Mission Marketing Group’s acquisition of social agency Addiction – well, they’re at it again. At the end of last week they acquired the multi-channel (and multi-award-winning) integrated agency balloon dog.
AIM listed Mission is a collection of agencies working across a number of different disciplines – advertising, media, digital, direct - in a number of locations across the country from London to Edinburgh, Colchester to Newcastle.
Balloon dog was founded in 2008 from what was previously known as Fox Murphy and employs approximately 80 staff in offices in London and Norwich. It offers a wide range of services, spanning from advertising, design, digital, branding, direct marketing, social media and strategy planning, and its clients include: Aviva, Barclays, Barclaycard, Pret a Manger and Rightmove. The current balloon dog management team, alongside CEO James Clifton who is joining the Mission board, includes some impressive names - Greig McCallum (Strategic Managing Partner), ex-OgilvyOne and Tequila ECD Cordell Burke (Creative Managing Partner), Sian Potter (Commercial Managing Partner), and Ashley Bliss (Financial Managing Partner). It appears that all will be retained.
Balloon dog is by all accounts a profitable agency with a good client list and a stable, talented management team. Becoming part of Mission looks like a good fit – it gives the agency scale and allows it to work with other like-minded, expert entities while still remaining reasonably autonomous.
But what about Mission? The new acquisition widens Mission’s geographical footprint (it has offices in the North, East, West and in the capital) and client base – it now has over 800 staff in 17 offices. At the time of writing shares in the group remained stable following the acquisition. Mission is definitely an outfit to watch – following a tricky time during the 2009/10 downturn, it has been back back on the growth trail, seem ambitious and hungry for success.
It’s a different (albeit creative) industry, but there’s an interesting comparision which might be made with the early days of EMAP, the magazine publisher which enjoyed a phenomenally successful 1980s and 90s before being hit by the downturn in print mags and an overly ambitious series of acquisitions.
Early on EMAP was a collection of semi-autonomous publishing houses based in Peterborough, London and elsewhere, some concentrating on special-interest titles, others on more mainstream fare. It was famous for bold and successful launches – Q, Heat, Angling Times, Smash Hits – and canny acquisitions – FHM, Motorcycle News, The Face – and was for almost two decades the biggest magazine publisher in the UK after IPC. What made EMAP so successful was that it adopted a decentralised approach, allowing its management to play to their entrepreneurial strengths and giving talented editors and publishers free reign to be creative – no mean feat when you have shareholders to consider.
Like EMAP, Mission has an intriguing mixture of specialist operations (ThinkMedia is the largest buyer of estate agent media in the UK and April-Six is one of the country’s leading technology channel marketer) and more mainstream agencies such as Bray Leino, Story and Robson Brown.
If Mission can resist the temptation to pull everything toward the centre, while at the same time keeping costs under control and nurturing talent and clients, as well as the teams’ creative impulses, then there could be a bright future – and now that the group has real scale, it won’t be long before it’ll be able to add really big global clients to its portfolio.
Looking at other transactions, another data specialist has been acquired in the last few days – Informa plc, the multi-national B2B publishing and events company that owns Lloyd’s List, Routledge and market researcher Datamonitor, has bought Zephyr Associates, a US company that specializes in sophisticated analytics tools for investors.
Informa paid $62m in cash and this would seem a smart investment for the long term. in the long term. First off, Zephyr will help Informa increase its digital subscription revenues and improve its offering to investors looking for high-quality data; and secondly, Zephyr has over 800 blue-chip customers around the globe. At the time of writing Informa shares were up about 10p, so the markets are obviously feeling the same way. And the rise was in spite of the group announcing earlier this week that like-for-like sales fell 2% in the first nine months of 2012! CEO Peter Rigby expects to start seeing a return on his investment as early as next year.
Of course, not every hot marcomms agency is looking to be acquired by a larger entity (at least, not yet!). Some prefer to go down the management buyout route, and this is the case with BcsAgency, an East Midlands-based PR, advertising design, digital and direct outfit.
Two director-shareholders have just completed a deal to take full control of the Nottingham-based company.
Co-founders Murray Carmichael-Smith and Rob Wilmot are taking over as majority shareholders after buying out Alan Boyden. Wilmot says he and his partner have “big plans” for the agency after “several recent big wins on the PR and digital sides of the business over the last month.”
BcsAgency's client base is an interesting regionally-based offering that includes Jewson, Gibbs & Dandy, Donington Park, England Netball and Timico. It’s also weighted towards the B2B side. They’ve also done projects for some big clients such as Siemens, CapitalOne and Eon. We wish them well – and who knows, in five years’ time BcsAgency might become a target for one of the big boys looking for a regional B2B specialist – being regional it could just be another one for The Mission.
Tony Walford is a partner at Green Square, Corprate Finance Advisors to the media and marketing sector.
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