SapientNitro is buying iThink, one of Brazil's last digital agencies to remain independent after several years of rampaging through Brazil's digital market by the world's biggest ad holding companies.
Coming late to that party, SapientNitro is taking an 81% stake in Sao Paulo shop iThink, founded by CEO Marcelo Tripoli a decade ago. Separately, SapientNitro bought data-centric company mPhasize last week in the U.S.
"We don't do a lot of M&A," said Gaston Legorburu, SapientNitro's Miami-based chief creative officer. "If we do, it's smaller, strategic things and the cultural fit was really important for us. A lot of our competitors were here earlier."
"We received formal proposals from some of them," Mr. Tripoli said. "We are one of the last big independent digital agencies left in Brazil."
The others have been snapped up. Last year, Dentsu bought local shop Lov and WPP Group's Ogilvy acquired Foster. In 2011, WPP bought F.biz and WPP's Possible Worldwide picked up Gringo. In 2010, WPP, Interpublic and Publicis Groupe all bought digital shops in Brazil: Midia Digital and I-Cherry for WPP, AG2 went to Publicis, and Interpublic scooped up Cubocc.
Mr. Legorburu said iThink will be known as SapientNitro iThink for the next six months to a year as a transition to just using the SapientNitro name in Brazil.
The two agencies don't have any clients in common. With about 60 staffers, iThink works for Johnson & Johnson, Nestle, Telefonica's Vivo wireless service, PepsiCo and Google. SapientNitro's client list includes Citi, Coca-Cola and Target. Mr. Legorburu said clients like Unilever and Chrysler are driving SapientNitro's international expansion, with Brazil a key market as the host of the World Cup in 2014 and the Olympics in 2016.
Mr. Legorburu doesn't rule out expanding elsewhere in Latin America, but said the agency handles some work for the U.S. Hispanic market and Spanish-speaking Latin America out of Miami. SapientNitro is No. 13 in the Ad Age DataCenter's ranking of the world's 50 largest agency companies, with 2011 worldwide revenue of $685.7 million, about two-thirds of it in the U.S.
Mr. Tripoli estimates that digital accounts for about 15% of all ad spending in Brazil. Although there's no official ranking of Brazil's digital agencies, he said the only digital shop larger than boutique-size that hasn't been bought yet is W3Haus. That Sao Paulo agency is likely to attract suitors as the World Cup and the Olympic Games approach.