That's about twice the price afforded giant ad agency Grey Advertising, whose Grey Interactive alone had revenue last year just below the Luminant eight.
What's the big idea?
When Mr. Marmol went to work a year ago on the idea that became Luminant, he saw interactive professional services as a growth opportunity and a chance to stake a claim by merging entities to deliver scale and scope. Think of Luminant as a systems integrator of Internet professional services.
There is no well-established market leader unless, he added with a chuckle, "you want to consider us, but I think we can wait a little bit before we put in that claim."
Others already claim to lead the market Luminant has entered. USWeb/CKS, for example, had first-half revenue more than four times that of Luminant's eight predecessor shops, which had an operating loss of $56.1 million in the first half of the year on revenue of $41.4 million. Luminant's pitch--one-stop shopping for creativity, technology and strategy--sounds like what USWeb/CKS has said the past year.
There's no denying the business credentials of Luminant's management and board, or the status of its biggest investor and blue-chip clients.
Mr. Marmol, 51, a Harvard MBA and 18-year veteran of consultancy McKinsey & Co., most recently was a VP of Perot Systems, Ross Perot's technology services business. Mr. Marmol's confidence, approachable style and a ready sense of humor make it easy to believe in what he's selling.
Chairman Michael Jordan, a retired CBS Corp. chairman-CEO and former McKinseyite, is a veteran dealmaker. Management includes other McKinsey alums.
Young & Rubicam, with a 20%-plus stake, is Luminant's largest shareholder after selling the New York operations of its interactive shop, Brand Dialogue, to Luminant.
Luminant, whose largest inherited client is IBM Corp., also does work for Microsoft Corp. in the computer industry. It works for telecoms AT&T Corp., Bell Atlantic and MCI WorldCom. As long as "the right set of precautions and procedures" are in place, Mr. Marmol said, Luminant can work with clients in the same industry.
Mr. Marmol is particularly proud of winning new or additional work from clients.
Luminant is working on a corporate Web site project for Y&R client Philip Morris Cos., business that Mr. Marmol said came in "because Brand Dialogue was to be Luminant."
United Airlines greatly expanded its relationship with a $50 million, five-year agreement, Mr. Marmol said. That includes Internet-related services tied to e-commerce, information technology, maintenance and flight operations, said Andy Studdert, United's exec VP-chief operating officer.
"The component parts of a young company can have both the vigor and experience that you need in balance, and that's what I see in Luminant," said Mr. Studdert. "These are tried-and-true professionals."
United is so sold on Luminant that it holds warrants to buy 300,000 shares of stock at the IPO price. Is Mr. Studdert concerned that United is flying with a company that has no long-term record? "Never a second thought," he said.
ACTION PRECEDED REALITY
Mr. Marmol contends Luminant acted like an integrated organization six months before the September IPO and roll-up.
"We were actively presenting the Luminant capabilities across the family of firms in new client situations," he said, noting there were 18 such presentations in two months before the IPO. "There's no better way of creating a common culture, a common organization, a common set of values and beliefs than doing real work together in client settings."
Mr. Marmol said Luminant wanted ventures that shared "a strong base of common agreement" in culture and sound financial management. In addition to Brand Dialogue, other ventures now operating under the Luminant name are Align Solutions Corp., a Houston Web services and systems integrator; Free Range Media, Seattle, a Web-site developer; interactive shops Integrated Consulting, Dallas, InterActive8, New York, and Multimedia Resources, Larchmont, N.Y.; Potomac Partners Management Consulting, Reston, Va., an e-commerce consultancy; and RSI Group, Dallas, a data processing company.
Luminant's acquisition spree may not be over: Mr. Marmol is considering acquisitions in Europe, San Francisco and Chicago.
But Mr. Marmol also is counting on internal growth. Luminant now employs nearly 800 people, a number he expects to at least double during the next year. Said Mr. Marmol: "Their history will be Luminant's history."
Copyright October 1999, Crain Communications Inc.