That's just how the company likes it. "We're pretty low profile," said Photon's CEO, Matthew Bailey, in Sydney. "We work for the businesses we own, we're not a hierarchy or corporate structure where companies report up to us. We work for them." Photon has businesses, he said, not clients, and only has a staff of six at the corporate level.
"It's a different philosophy. We look for companies that aren't necessarily for sale who want to be part of a culture where they can continue what they're doing."
He speaks from first-hand experience. Mr. Bailey joined the company after his family's sales, marketing and merchandising business, the Bailey Group, was bought by Photon in late 2003. When Mr. Bailey was approached by Photon's founders, Tim Hughes and Siimon Reynolds, Bailey Group wasn't for sale either, he said with a laugh.
Owns 40 companies
Photon's executive chairman, Mr. Hughes, who holds the same title at Macquarie Media Group, which owns radio and cable TV stations across Asia, founded Photon eight year ago. Today, it owns more than 40 companies in field marketing, research and integrated and digital marketing and communications, mostly small firms that fell below the radar of acquisition-hungry behemoths such as London-based WPP Group.
Although Photon does not have a strong international profile, it has built up a solid reputation in Australia, where the majority of its acquisitions are headquartered. Its key assets there include two creative hot shops, BMF and BWM, and Bellamy Hayden, a media planning specialist similar to Naked.
Photon was listed on Australia's stock exchange in early 2004, providing cash to speed up the pace of its acquisitions.
After exhausting opportunities at home, last year Photon stepped up its international development, snapping up companies such as U.K. retail marketing group REL and a leading U.K. brand-experience agency, Sledge. In December 2007, Photon bought Findology, an American search engine and online-advertising company based in Los Angeles, after previously acquiring Houston-based OB Media.
Photon's executives are a "smart financial business bunch. You could describe them as a less sophisticated form of Omnicom Group," said Pete McDonald, CEO of Agency Register, an independent agency search, review, selection and relationship-management consultancy in Sydney.
Like that major U.S. advertising holding company, Photon "wants companies to behave as they did before they were bought. That approach has helped them pick up good acquisitions. The companies they buy know they'll get the support to continue doing what they were doing. They won't feel compromised and homogenized."
A shared long-term strategy
Naked Communications, the company's most high-profile acquisition, now places Photon on the global stage, but the deal follows the company's long-term strategy. "We're very opportunistic. We're looking for any business that fits the culture and have been talking to Naked for about six months. They reckon they're a bunch of misfits, and we're a bunch of misfits, too," joked Mr. Bailey.
"The key to dealing and working with entrepreneurs is understanding that while financially they may not own the business anymore, they do own it emotionally. We're there to support these companies, not tell them how to run their business."
Photon is also familiar with Asia/Pacific, a region Naked is eager to expand into. Just four years after opening an office in Sydney, Naked is a "resounding success in Australia," said Mr. McDonald. "It certainly has beaten local expectations."
Naked also has an office in Tokyo helping marketers such as Coca-Cola, Sony and Nokia. The deal "helps us put capital into three specific markets where we don't have a footprint -- China, India and the west coast of the U.S.," said Matt Baxter, Naked's group partner, Asia/Pacific.
"We've been privately funding expansion out of our own pockets. The reason we chose to do this deal now is because the brand was growing faster than our bank balance," Mr. Baxter said. "One of our biggest priorities is realizing our potential faster, and China is without a doubt at the top of that list. We need to be globally competitive in an important marketplace."
Mr. Baxter is heading to China in mid-February to begin opening offices in Shanghai and Beijing and cement relationships with marketers like Nokia that it works with globally. "Hopefully, we will shortly sign deals and start working there. At the end of this year at the latest, you will see us in China," he said.