Is there any limit to Aegis’ newfound ambition?
Scarcely a fortnight ago the Green Square Deal Monitor was buzzing with news of fresh acquisitions by Aegis Media. Over the past week it seems to have gone up another gear.
Aegis-bound: Social Embassy founder Steven Jongeneel
As we’ve said before, Aegis has never been short of ambition and energy, but following its just-short-of-$5bn buyout by the Japanese giant Dentsu earlier this spring, it now has even deeper resources to fulfil those ambitions. And it is ambitious; it wants to be the world’s biggest media specialist (in the digital space especially) to harmonise nicely with those of its new owner (which wants to expand aggressively outside its Japanese heartland).
No less than three Aegis deals have popped onto our M&A radar over the past week or so – the purchase of Dutch social media agency Social Embassy; a buyout of Romanian agency Kinecto; and the acquisition of Belgian experiential and events specialist NewWorld.
All three deals are interesting in their own individual ways and are a fascinating indicator of the mindset of Aegis post-Dentsu; all are worth looking at in more detail.
Social Embassy, based in Amsterdam, is a specialist social media agency whose focus is on community management and consulting. Established in 2008, it has built a fast-growing business, with a diverse client base including Unilever, Coca-Cola and KPN.
Details of how much Aegis paid for Social Embassy have not been revealed, but I suspect what caught the acquirer’s eye was the fact that the high-flying Dutchmen have developed monitoring software to analyse the online “landscape” around a brand.
The resulting “Social Media Brand Map” model classifies brands based on the share of online conversations and sentiment of posts, compared with competing brands. Based on the results of its research, Social Embassy helps clients develop social media strategies and creative concepts for content and activation, to then measure and interpret the results. The company also conducts its own Social Media Monitor research study to uncover how top 100 brands make use of it.
Following the acquisition, Social Embassy will work closely with the Netherlands-based social media team of Aegis’ digital marketing unit, Isobar. It’s a great deal for everyone concerned: Social Embassy founder, Steven Jongeneel, gets the backing to expand his unique offer into new markets (and probably gets a potentially very lucrative payday further down the line), while Social Embassy’s expertise and client base strengthens Isobar’s market position and will generate the benefits of greater scale in the Netherlands. And of course, Aegis gets some very interesting software.
Unlike the Netherlands, Romania is seen as a bit of a backwater in the marketing services world. But with its membership of the EU, the former communist state is looking like an attractive prospect for ambitious pioneers – especially those with an eye on the potentially enormous Turkish market.
Which is why Aegis has just bought Kinecto, part of Tempo Creative Group (a kind of Bucharest-based mini-WPP and one of the top-tier digital agencies in Romania), from its shareholders, Radu Ionescu and Dragos Grigoriu, for a total consideration of up to €5m, based on future business performance.
Established in 2003 by former journalist Ionescu, who will be staying on as managing director, Kinecto was one of the first digital agencies in Romania and grew rapidly following its 2008 acquisition, by Tempo. Kinecto had a turnover of just under €1m in 2012, up an impressive 32 per cent on the year before.
The company will be folded into Isobar and rebranded as Kinecto Isobar. Again, Aegis seems to have got itself a great deal – an experienced full service digital marketing team with connections and knowledge in the Romanian and Bulgarian markets, who can help Aegis/Isobar’s global clients expand into the region – at minimal financial risk.
Finally, we return to the Benelux region, and Aegis’ acquisition of the NewWorld group, based in Mechelen (one of Belgium’s most important Dutch-speaking municipalities) and one of the leading brand activation and events specialists in the Benelux region.
Headed by founder Wim Voss and working in the three Benelux countries of Belgium, the Netherlands and Luxembourg, NewWorld specialises in experiential marketing, live communication and field marketing, with some great clients – including Miele, Mazda, Lyreco, Metaxa, L’Oreal and Ralph Lauren.
The business will remain NewWorld, but will become part of the psLIVE experiential network with immediate effect. Wim Voss, founder of the NewWorld group, remains as managing director of the business and will become part of the management team of Aegis Media Belgium.
The acquisition (full details of which have not been revealed) is consistent with Aegis’ recent strategy of acquiring businesses which enhance the breadth of products and services within its networks – so in this case they’re buying the talent of Voss and his team, good local connections, plus an agency with skills in all the right areas: brand activation, design and development, events, logistics, digital print, creative, mobile activation and even tailor-made construction (NewWorld has its own in-house team of specialist carpenters!).
None of these acquisitions have made the headlines like last week’s Yahoo! buyout of Tumblr. But this spurt of activity by Aegis should be reported – it’s important because it shows the company’s energy and ambition, and gives a clue as to its wider strategic thinking.
And just as importantly, this little shopping spree sends out a clear message to competitors that Aegis is no longer “just” a collection of media agencies but a global digital and marketing services group. Sometimes the small buyouts matter as much as the big ones.
Barry Dudley is a partner at Green Square, corporate finance advisors to the media and marketing sector.