CKS said it will pay $24 million in stock for the Raleigh, N.C., agency and account for the transaction as a pooling of interests.
The fast-growing integrated communications company has made a slew of acquisitions in business marketing, design and integrated marketing, with the result being that CKS' annual revenue base will jump to about $90 million, from about $35 million in fiscal 1995.
Mark Kvamme, CKS chairman-CEO, said he sought an agency with good clients and strong TV creative skills to help round out his firm's capabilities.
"One of our areas of weakness is broadcast advertising," Mr. Kvamme said. "This gives us almost a full quiver."
For McKinney, CKS' financial resources will improve geographic and resource expansion prospects. CKS' interactive expertise will help McKinney broaden the scope of its creativity for clients.
"This pushes us ahead of a lot of other agencies that don't have these capabilities," said Don Maurer, president of McKinney.
With nearly $20 million in revenue, a strong creative reputation and two big clients in Audi and Royal Caribbean Cruise Lines, 28-year-old McKinney will keep its name and office. Longtime leaders Bob Doherty, chairman, and Lloyd Jacobs, vice chairman, will transition into retirement, leaving a trio at the helm: Mr. Maurer; Rick Myracle, exec VP-chief operating officer; and Pat Burnham, creative director.
CKS has taken advantage of its high stock price--up more than 150% from its December '95 opening--to shell out more than $50 million for acquisitions since September. McKinney's principals negotiated for a price 25% higher than annual revenue, a rich multiple in the advertising business.
Copyright February 1997, Crain Communications Inc.