Deloitte could move to acquire Engine Group as response to Accenture's Karmarama buyout
Engine was acquired by Lake Capital in 2014 but the US private-equity firm began entertaining approaches to sell the business earlier this year after hiring investment bank Jefferies.
The Drum has learned from multiple sources that there is interest from the global consultancy in buying the company as it looks to bolster its own marketing services offering. Other suitors are also said to be in the frame.
Terry Graunke, executive chairman of Engine Group said that he could not comment on speculation.
“We continue to execute on a clear strategy which focusses on outstanding client service delivered by best-in-class professionals. We are more than 2,000 strong, with annual revenues of over $450m and a record of delivering award winning work for many of the world’s leading clients,” he said.
“We continue to enjoy being an independent Group with a strong entrepreneurial culture. This ensures Engine is a great place to work and will be a great company to do business with for many years to come. In the meantime, we continue to focus on growing the Group organically and by acquisition and remain robustly financed. It’s business as usual.”
The deal would be one of the most significant acquisitions of an advertising group since Karmarama was bought by Accenture last year. It was widely seen as a major step change in consultancies entering into the marketing arena and bolting on creative thinking to their usually more data and financial led businesses.
Within its marketing services offer, Deloitte currently has Deloitte Digital, its digital technology arm, and an IT Business Management arm.
While Deloitte Digital ranks among the 10 largest agencies in the world, its revenue (reported as $2.6bn in 2016) is dwarfed by Accenture Interactive at $4.4bn, according to AdAge.
It has thus far lagged behind Accenture when it comes to acquisitions. According to Results International, in 2016 Deloitte was involved in four marcomms M&A deals, the same number as IBM, while Accenture completed seven deals in the same year.
It bought US advertising agency Heat in 2016 and in February of this year bought marketing and analytics firm Cornerstone, based in Toronto.
Deloitte told The Drum that it wouldn’t comment “on market speculation” but said that “we continuously look for opportunities to better support our clients, including internal expansion and the acquisition of medium sized or boutique 'bolt-on' acquisitions where appropriate.”
Steve Antoniewicz, managing director of the Recommended Agency Register, said that given the recent Accenture deal to acquire Karmarama it would be no surprise to see another consultancy on the acquisition trail.
“There are not many independent groups around who can boast the creative track record of Engine so Deloitte would immediately be boost their creative capability and credibility at scale. This would give Engine access to the digital capabilities on offer through Deloitte and give the agency a much needed boost,” he said.