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Marketing Services Are Gobbled Up in Agency Consolidation
The New York Times July 20, 1999 by Stuart Elliott More agencies and agency companies are agreeing to deals to sell full or partial control to larger firms, as the acquisition boom remaking Madison Avenue continues. In several instances, the deals involve shops that specialize in marketing services apart from traditional advertising tasks like creating television commercials and print advertisements. Spending for those services, which include direct marketing, sales promotion and interactive marketing, has been growing faster than their more familiar counterparts. For instance, Lopex P.L.C., a marketing services agency in London, has agreed to be sold to Havas Advertising in Paris for $105 million in cash. Lopex owns agencies that specialize in services like advertising, direct marketing, research, public relations and design. The Havas offer for Lopex beat an all-stock offer from the Incepta Group in London, which owns 29.9 percent of Lopex along with a company called Southwind Ltd. Havas, which owns agencies like Euro RSCG Worldwide, is paying about $1.88 for each share of Lopex, 54 percent more than the closing price on July 1, the day before the offer from Incepta. As of Friday, Havas had bought 50.1 percent of the shares. Incepta, which also operates marketing services and public relations agencies, said it would let its hostile bid lapse in light of the offer from Havas. The Lopex deal came less than a week after Euro RSCG combined its worldwide marketing services operations into a unit called the Sales Machine, a network of 76 agencies with 1,600 employees in 40 countries working for clients including Dell Computer, Intel and Peugeot. That unit is already landing additional assignments; the Euro RSCG Tatham Sales Machine in Chicago has been named primary agency of record for marketing services and point-of-sale advertising for Midas Inc. In other deals: Agency.com in New York continued its European expansion by taking what was described as a significant minority stake in Pictoris Interactive S.A. in Paris, a leading French interactive agency with clients including Accor, Groupe Danone and Lotus. Terms were not disclosed. Pictoris has been working with Agency.com on projects since earlier this year. Medicus Group International in New York, part of MacManus Group, acquired Healthtech Solutions, an information technology and educational services consulting company in St. Louis with clients like Bristol-Myers Squibb and Pharmacia & Upjohn. Terms were not disclosed. Healthtech will operate as an independent unit of the Discovery Global Medical Communications Group of Medicus. WPP Group in London, which owns agencies including Ogilvy & Mather Worldwide and J. Walter Thompson, acquired PFour Consultancy, a London-based company with revenue of $5.2 million. PFour advises financial service marketers on issues like sales force reorganization and partnerships. Terms were not disclosed. Lighthouse Holdings Inc. in Chicago, continuing its effort to acquire marketing companies, agreed to buy Davidson Marketing in Chicago. Terms were not disclosed. Davidson, with clients including Keebler and Microsoft, will operate as a stand-alone unit of Lighthouse. And Cordiant Communications Group P.L.C. in London acquired a majority stake in Bates Clarion Ltd., an agency with offices in Bombay, Calcutta and Delhi, India, and annual revenue of about $2.3 million from clients including Nokia and Warner-Lambert. Terms were not disclosed. Bates Clarion previously had a non equity affiliation with the Bates Worldwide unit of Cordiant. |
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