The bosses of independent agencies, especially those with digital and social media expertise, are likely to find themselves being inundated with “offers they can’t refuse” on the back of a huge surge in M&A activity this year.
So says Results International, which has closed £100m worth of deals in the past two months alone. The company, a leading corporate finance and strategy advisor to the global marcoms industry, claims it has witnessed the busiest start of the year since 2007.
Completed deals include Latitude/Callcredit, BGB/Four Communications, DLKW/Lowe and Total Healthcare Group to United BioSource Group (UBC). Publicis has also announced a deal to purchase Chemistry with Results International acting as advisors.
“Social media will definitely be under the spotlight this year,” said Results International managing partner Keith Hunt. “We believe the Techlightenment/Experian deal a few weeks ago may well signal the start of a social media agency land grab. There is plenty of demand but a limited number of independent players to be sold and deals will probably be done at lightning speed.”
Andy Collins, Results International senior partner who advised Chemistry on its sale to Publicis, added: “We are definitely seeing an appetite for agencies like Chemistry who have put digital at the heart of an integrated offer accompanied by best-in-class creative and strategic skills.
“Such agencies will continue to command high prices, unlike those digital agencies with a commoditised offer who sit lower down the food chain, operating on smaller margins and whose services can easily be outsourced to cheaper markets.”
Based on such a buoyant start to the year, Results predicts that heads of independent agencies who have been delaying a sale should and will respond to the improving environment.
