Europe's Financial Crisis Hobbles Engine's U.S. Expansion

Amid Slowdown, the U.K. Independent Communications Group Also Loses Martin Puris as CEO in New York

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Martin Puris has stepped down as CEO of Engine Group USA, as the eurozone crisis has hobbled the U.K. communications group's stateside ambitions in recent months.

Martin Puris
Martin Puris

In February 2010, London-based Engine launched a U.S. subsidiary to acquire shops and transplant its model here. Mr. Puris, a longtime adman and co-founder of Ammirati & Puris, and John Bernbach, son of Doyle Dane Bernbach co-founder Bill Bernbach, were to lead the efforts. After doing two deals in quick succession, Engine made no U.S. purchases all of last year as turmoil in its European home market mounted.

In April 2010, Unilever's former global CMO, Simon Clift, joined Engine's board to advise on, among other things, the company's international expansion.

In 2010, Engine received more than $50 million from private investment firm HIG Capital to expand in the U.S., China and elsewhere. The deal allowed Engine to draw down an additional $47 million in the following several years, but it has not touched those funds.

"2011 was a strange year for the macroeconomic environment, so we decided to see how the Greek and other related tragedies played out before moving ahead to invest more in the U.S.," Engine Group Chairman-CEO Peter Scott told Ad Age .

In 2011, however, Engine did purchase two U.K. shops, Mischief PR and production firm Fantastic Thinking, as well as Identica Shanghai (later renamed Calling Brands).

To build Engine USA, the company acquired Ian Schafer's digital agency, Deep Focus, in October 2010 and the 35-person social-media outfit Noise that December. Investment banker Phil Palazzo advised both deals.

Mr. Puris will staying on as an adviser; Mr. Bernbach will continue to serve as chief operating officer.

With conditions stabilized somewhat, Mr. Scott said he expects further activity in the U.S. "We had a six-month hiatus, and now we're back on track," he said.

Engine Group had revenues of $117 million in 2010, according to public statements. Earnings are not yet available for 2011.

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