AKQA Sells Majority Stake to Private-Equity Firm

Asking Price Said to Be $250 Million

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SAN FRANCISCO (AdAge.com) -- AKQA, one of adland's hottest digital properties, has sold a majority stake in itself to the private-equity firm General Atlantic.
AKQA CEO Tom Bedecarre said the financing was secured as a means of paying off previous investors and shareholders.
AKQA CEO Tom Bedecarre said the financing was secured as a means of paying off previous investors and shareholders.

Much speculation
The San Francisco-based shop, whose clients include Visa, Coca-Cola Co., Microsoft Corp. and McDonald's, didn't disclose the terms of the deal, which follows weeks of speculation as to where the interactive shop would end up. Most of the ad-holding companies and a number of private-equity firms took a look, but some executives familiar with the matter said the main industry players balked at AKQA's asking price: $250 million, a whopping multiple of almost three-and-half-times its annual revenue of $70 million.

The news comes a day after Publicis Groupe closed its $1.3 billion acquisition of Digitas.

In an interview, AKQA CEO Tom Bedecarre said the financing was secured as a means of paying off previous investors and shareholders. "We value independence, and this will help us grow and do what we want to do and be very digitally focused," he said.

Mr. Bedecarre said the agency hired investment bank Morgan Stanley to explore the possibility of holding a public offering, selling the shop to an agency-holding company or finding a new investment partner.

Investors in agency
Mr. Bedecarre declined to discuss details of the deal, but said it would be used to pay off Francisco Partners and Accenture, which invested $54 million in the company in 2000, as well as his former partners Matt Haligmann and Kirk Citron of agency Citron Haligman Bedecarre. That agency and four others joined to form today's AKQA.

"The goal is we want to build the world's best digital marketing agency," he said. "There was a lot of interest in the company."
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