Communispace Is Latest Shop on the Block

Massachusetts Agency Said to Be Looking to Ink $100 Million Deal

By Published on . 5

NEW YORK (AdAge.com) -- Communispace, which builds and manages customer communities for brands online, is looking for a buyer, and venture-capital firms, technology companies and holding companies -- including Omnicom Group -- are among those to have taken a look, according to industry executives.

Communispace did not immediately return calls, while Omnicom representatives declined to comment.

The 11-year old, Watertown, Mass.-based shop hopes to ink a deal for at least $100 million, according to two executives familiar with the negotiations. The agency brings in $45-50 million in annual revenue and is somewhat profitable, one person said, which would make the asking price -- at least double revenue -- a reasonable deal in ad land terms. However, another person familiar with Omnicom's acquisition strategy claims that $100 million would be too rich for the holding company. Omnicom has a reputation for being extremely frugal when it comes to acquisitions.

One reason why an Omnicom deal would make sense? Communispace lists as its clients several marketers that work with agencies under the holding company's banner, including HP, PepsiCo, FedEx, Kraft and Campbell. But the Communispace client list also includes agencies at rival holding companies, like Havas' EuroRSCG, Publicis Groupe's Starcom MediaVest Group and Interpublic Group of Cos.' Martin Agency. Were an Omnicom deal to happen, such alliances would likely have to dissolve, as would accounts with clients like Verizon, a major competitor to a big Omnicom client, AT&T.

Communispace has five U.S. offices as well as posts in London, Sydney and Imperia, Italy. CEO-cofounder Diane Hessan helms the agency's staff of nearly 300 and is active on Twitter using the handle @communispaceceo. (The company has hosted surveys for Ad Age in one of its women's communities)

For Omnicom, it's been several years since the number two holding company has made a material acquisition, though it has bought various smaller shops such as direct shop Kern Organization in February 2008 and Rodgers Townsend in 2006. Omnicom also took a majority stake in interactive marketing and design agency 180 in late 2006.

It's been a busy year in terms of agency consolidation and acquisition. Elsewhere in the industry, Engine USA, the U.S. outcropping of the U.K. independent agency bearing the same name, has been aggressive in picking up shops such as Noise and Deep Focus to build a New York agency collective. Magazine publisher Meredith has also proclaimed it's in the market, and New Jersey-based Rosetta recently acquired mobile agency Level Studios. Although Dentsu was reported to have stepped away from negotiations for digital hot shop AKQA, another prominent suitor has yet to emerge.


~ ~ ~ Contributing: Brad Johnson

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