Engine Group, home to Partners Andrews Aldridge and Fuel, is set to expand its services across business intelligence and data, creative services and digital content following a £100m buyout by US venture capitalist group Lake Capital.
The move will result in present private equity owner HIG – which invested £62.5m in the business in 2010 to fund Engine’s expansion into the US and China – being bought out.
The agency group was started by chairman and group chief executive Peter Scott following a 2004 management buyout of Havas-owned London ad agency WCRS.
It bought Partners Andrews Aldridge and Fuel for £18m in February 2008, with Steve Aldridge and Phil Andrews trousering over £4.5m each in cash and the same amount in shares.
Andrews has since left the group, while Aldridge is now Engine executive creative director and chairman of Partners. Under the Lake Capital deal, the combined entity will have revenues of about $400m.
The deal has been a long time in the making, according to a report in Ad Age. Lake Capital co-founder Terry Graunke said: “We looked at trying to help them originally try to buy WCRS out of Havas 8 to 10 years ago. [Peter Scott] ended up eventually getting it done and partnering with HIG. So we were not part of that transaction.”
He added: “Our thesis is that pre- and post- the Omnicom-Publicis merger and lack of completion, there’s a real opportunity to create a middle-market player in the space.”
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