Growing the old fashioned way is often overlooked but it can be one of the best ways to grow.
Growing your ad agency the old fashioned way.
A general agency in the Mid-Atlantic region was strong at new business but weak in digital. They hired us to help with a search looking for a cross-town merger candidate. Within a few days, a suitable digital firm across town was located and, almost as expected, the digital agency was very good at below-the-line work but very weak in new business. A quick acquisition was agreed to, made, and the digital firm was moved, staff and all, into extra space within the agency at a nice savings in rent and other back-office expenses.
With the work put into the firm in the first 12 months from existing accounts and a few new business wins run by the general agency the top line expanded nicely. With it, when combined with the reduction in operating costs, the digital firm is now 100% paid for. The digital firm owners have retained some ownership but their firm has been successfully re-branded so it can compete on new accounts without any complications.
It’s really a matter of keeping the business cards straight but both firms are prospering and the agency owner considers it one of the best moves he has ever made. Like the old 3 Martini lunch from the Mad Men era, it really is an old fashioned way to grow.
Cross-town mergers can pay big dividends because of the immediate savings in expenses, the ease of working together because both firms are in the same city, and the advantages of combining skills that benefit the other side.
If you have any questions about our M&A work, reach out to our expert – Henry Corona, our M&A Practice Leader, brings over 30 years of merger and acquisition experience to your firm with one phone call. He has worked with Sanders Consulting Group for over 20 years in the area of financial enhancement and productivity improvement. You can reach Henry at [email protected] any time!
Photo by Rex Boggs and used under creative commons
