NEW YORK (AdAge.com) -- Consolidation in adland continues with the announcement today by WPP that it has purchased 18-year-old Toronto-based creative network Taxi, and placed it under its Young & Rubicam Brands unit.
For WPP, which is the largest advertising holding company in the world and has for the past few years been focused on large acquisitions in the market research and digital space -- such as its purchase of Taylor Nelson Sofres, 24/7 Real Media and Schematic -- the acquisition of a modest-sized traditional agency network signals attention to improving the group's creative output. It also gives WPP, which has the strongest presence in Asia of any of the holding companies, a bit of a boost in North America.
For Taxi, which has seven offices, five of them in Canada, and one each in New York and Amsterdam, the deal appears to be largely about achieving scale globally and giving clients access to digital services -- and, of course, an influx of cash. The agency's clients include Canadian Tire, Telus and WestJet.
WPP didn't disclose the price tag, but it did say Taxi had worldwide revenue of $53.7 million Canadian in the 12 months ended June 30 (or $50.9 million based on average exchange rates for that 12-month period). The shop had about 350 staffers at the time of the acquisition, implying revenue per employee of about $145,000.
WPP Chief Executive Martin Sorrell, who was in Spain at the time the announcement was made, referred comments on the deal to Peter Stringham, chairman-CEO of Young & Rubicam brands, and to Paul Lavoie, Taxi's chairman.
"We've been solicited many times over the past few years, but starting in April we started thinking about a partnership," Mr. Lavoie told Ad Age, noting Taxi "met with four or five groups." "We have big plans. There's an appetite for Taxi in other countries and would like to expand the Taxi network globally and work on global campaigns." He added: "We need to have stronger relationships with CRM and with our digital offering."
One sticking point for Mr. Lavoie, who founded Taxi in 1992 with his partner, Jane Hope, was keeping the Taxi name and personality. "At Omnicom you have to change your name -- like Taxi DDB. ... What I like about WPP and within the Y&R Brands [family] is that they haven't changed Wunderman and Blast Radius and a lot of the companies in their portfolio."
"It will fit perfectly with the 30 companies at Young & Rubicam Brands that span the marketing-communications spectrum offering another exciting dimension to create innovative integrated solutions," Mr. Stringham said of Taxi. "We also believe that their strong client roster will benefit from the wide range of resources and talents at Young & Rubicam Brands."
The leadership structure of Taxi appears intact; Mr. Lavoie remains chairman, reporting to Mr. Stringham, who incidentally is also Canadian, while Rob Guenette remains Taxi's CEO.
Mergers-and-acquisitions activity has been high in the wake of the recession, though many of the purchases are being made beyond the traditional set of holding companies such as WPP, Omnicom and Publicis; the industry has witnessed deals being made by publishers such as Meredith and Hearst, and by foreign-based companies such as Dentsu and Cheil.
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Contributing: Brad Johnson