MDC Partners Buys Indie RJ Palmer

Deal Adds Much-Needed Media Capabilities at Toronto-Based Holding Company

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After years of focusing its acquisitions on creative, public-relations and social-media shops, MDC Partners has turned its sights to an agency that can help it handle media buying for clients.

Nearly 12 months of quiet talks led to MDC inking a deal to purchase New York-based RJ Palmer, one of the few independent media shops left in the marketplace.

Terms of the deal were not disclosed, but the Ad Age DataCenter estimated RJ Palmer's 2010 revenue at $12.8 million. The company claims around $800 million in billings from clients such as Perdue Farms and Sherwin Williams. Peter Knobloch, RJ Palmer's CEO, said in a statement that the deal will help his firm "invest more deeply in analytics and technology."

Toronto-based MDC has been highly acquisitive over the past few years, but unlike the manner in which it's expanded most of its portfolio -- following what it calls a "lift-out" strategy, buying a majority stake in a company and gradually increasing the percentage -- in RJ Palmer's case the holding company bought 100% of the company.

It adds a bit of heft to MDC's roster of relatively small media agencies, including The Media Kitchen -- which is a part of Kirshenbaum Bond Senecal & Parnters -- Varick Media Management and Integrated Media Solutions, which it bought in 2010. The firm's Trade X Media, which it describes as a "corporate bartering service," was especially attractive to MDC, which said it will continue to set its sights on media acquisitions.

Most importantly though, MDC hopes the deal can help its agencies during new-business pitches to bring clients more full-service solutions that incorporate both creative and media resources.

"We are now in the position where we are frequently pitching multinational business with clients who are looking for holistic business solutions," said MDC Chairman-CEO Miles Nadal, in a statement. "Although we have long been in the media-planning business, our media-buying capabilities have been on a modest scale."

In addition to media, the company is signaling that it could look to make digital acquisitions this year. That would be an about-face; while most of the company's larger bretheren such as Publicis Groupe and WPP have jockeyed to add more digital shops to their portfolio, curiously, amidst its dozens of acquisitions in recent times, digital agencies have been few and far between for MDC.

In the past, Mr. Nadal has claimed that 's because MDC has built digital organically. "We didn't buy digital as a bolt-on, we wove it into the fabric of our agencies," Mr. Nadal told Ad Age in a 2010 interview. "That's why our growth rate is better than everyone else in the industry."

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Contributing: Brad Johnson

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