Th_nk acquired by Epam: why agency bosses sold up when it wasn't in the plan
It’s been 14 years since digital agency Th_nk was founded, then run, from a bedroom in Newcastle by Tarek Nseir and business partner Gary Glozier – a pair of university students. In the subsequent years it went on to win a huge contract for now-defunct Northern Rock and service the likes of Pottermore, Vue, and Liverpool FC, now it's being bought by engineering software firm Epam.
Following Th_nk's expansion into London, and earlier this year Liverpool, the acquisition will help the business expand its European digital expertise for a client base that includes the likes of Google, Microsoft, Coca-Cola and Burberry.
This is a deal that is all about increased scale for the business, which Nseir and managing partner Natalie Gross both firmly state will benefit all currently working within the agency.
“We’re joining to grow their capability and to grow the clients that we have to deliver on the ambition we have set out,” explains Nseir while discussing the deal with The Drum.
“We’re going to be hitting clients and boardrooms to look at how to use digital to transform their organisations,” he adds of where the agency is likely to go next following the deal that began with tentative conversations in the January of this year.
Both state that there was never an intention to sell this year, and in fact had rebuffed a number of approaches already from other companies.
“Even though we have had around eight approaches, we have had a lot of energy in this business this year and grown while winning lots of clients who we have done some brilliant work for, but all we see is growth ahead of us next year,” he reveals.
“It wasn’t really our intention to sell but as we learned about the Epam opportunity over a slow set of conversations, it quickly became clear that this was quite a unique opportunity for us. When we heard from others, it was quite clear that there was a bit of a scramble and people were coming to us just because they needed something – that wasn’t very attractive.
"It doesn’t feel like a strategic opportunity, and when you are busy and growing at 60% a year, you can’t spend lots of time speaking to everyone who picks up a phone because that takes a lot of time. It’s a big investment to figure out whether something is the right opportunity, but this caught our attention.”
In recent years, Epam - founded in 1993 in Minsk, Belarus - has acquired other digitally-focused businesses such as Boston headquartered design firm Contiuum in April. Last year it made over $1bn in revenue for the first time, having floated on the New York Stock Exchange five years prior.
The acquisition will take Epam over the 26,000 employees mark globally under the leadership of chief executive and president Arkadiy Dobkin.
Gross, who joined as managing partner around two years ago from Amaze where she was chief executive, is also co-president of Bima, the digital membership organisation, with Nseir. She, alongside the rest of the leadership team; Anita Rajdev, chief operating officer and Rick Curtis, partner at the agency, will remain following the deal, and are understood to be tied in for one-year post-agreement and heavily incentivised to stay long beyond the expiry of that.
“The reality is that you can’t ignore our circumstance and the circumstance of the industry. We are so proud of the work that we have done in helping global businesses create serious digital ambitions for the future of their business, not just their comms but their business. We stand in front of boards, shareholders, PE firms building belief in those businesses and that is exciting, but the challenge is when it comes to supporting them execute it, we just don’t have anywhere near the scale to be the totally effective transformation partner that we want to be,” explains Nseir.
The agency began to hear about and work with Epam last year when their own clients mentioned the company and began to bring it onto projects, he continues to explain. “We started having the conversation and we started to really understand what this business was and what they were doing and who they were doing it for, it very quickly became a very serious conversation for us.”
Asked whether he believes the agency would have sold soon anyway, he concedes: “It was getting to our time. The reality was, having just started to achieve our own little scale in a very different quantum to the scale that we will now be part of, I think we had a lot of growth in us.”
On Epam he adds: “This has been a really good time with Epam for this deal it’s great timing because they are growing exceptionally fast, they have real clarity of vision in terms of where they are going and they really need a firm very much like us and I don’t think they would have found another firm as perfectly aligned to them as us. What we would be looking for in a potential partner is exactly what Epam will bring to us.”
Gross adds: “There’s a lot of white space in front of us, and when you look at a lot of the other acquisitions, the opportunity to do what you’ve always done in terms of competency can be challenging, because of the organisational structure of the acquisitions and for this one, the synergy between both is really great. That’s so important to make sure that we are excited by what is ahead of us.”
As to their thoughts on not being acquired by an agency network, the pair groan at the prospect: “There was a time when selling to a network would have still frightened me as the DNA of the agency was still fundamentally geared towards advertising and campaigns, and for a business like ours which has always had that kind of leaning towards business change, we love comms but we also have that centre of gravity.
"There was a time that if you sold to a marketing services group, it’s very likely that the power and insane value of that fundamentalist thinking would be overlooked because creativity and planning ruled all.
"Now you look at where we are and you hear the stories and see where the marketing services groups are, they are feverishly trying to make sense of their own assets and teams and develop an understanding of how they align those teams to create a bright new future. All at the same time as everybody else has been diving into the same agenda that at one point they didn’t value that they could have done. It would have been honestly the last thing that we would have done.”
From a BIMA perspective, Gross still believes that selling to networks for some still makes sense, but that finding the right partnership was crucial, while Nseir believes that a VR or AR company would fit well within agency networks for a deal, but that is not the business they are in. He cites MediaMonks as an example of a different proposition that made sense to sell as it did to Sir Martin Sorrell’s S4 Capital.
“Some of the most impressive people I know work for our clients and that has been the case for some time. Both by accident and by following our passion, we have really focused on the business agenda and how digital fundamentally underpins that agenda,” states Nseir who also admits that consultancies may have been an interesting option and that there was no perfect target for the sale but he is pleased with the scale brought through the Epam deal.
“With all the consolidation taking place at the moment, competitiveness is a huge thing so as well as access to skills at scale, it’s also the competitive edge this gives us in the market for the type of work that we want to do,” offers Gross.
With the completion of the acquisition having gone through, the group will now report into Jason Harman, co-head of global business and senior vice president, Epam.
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