CKS NEARS DEAL TO BUY MCKINNEY;PROPOSED SALE SAID TO BE PRICED AT $8 MIL TO $11 MIL

By Published on .

CKS Group, Cupertino, Calif., is close to a deal to acquire McKinney & Silver, Raleigh, N.C.

Executives familiar with the talks characterized them as serious; people who know McKinney estimated the asking price at between $8 million and $11 million.

McKinney denied it has any deal in the works; CKS declined to comment.

The proposed deal would be the flip side of a growing industry trend, with a new-media company buying a more traditional advertising agency.

There has been a flock of deals with those roles reversed this year. True North Communications is close to completing a deal with interactive agency Modem Media, Westport, Conn., after four months of negotiations. And Omnicom Group is in talks with three additional new-media shops after announcing it was taking significant minority stakes in five others.

CKS, founded in 1987, went public in December and raised $40 million for acquisitions. Besides interactive marketing services, it has substantial package-design and corporate-identity units.

Earlier this summer, it agreed to acquire business-to-business agency Schell/Mullaney, New York, for up to $14 million in stock.

In 1995, CKS reported revenue of $35.4 million on billings of $233 million. McKinney reported 1995 revenue of $13.7 million on billings of $132 million. Founded in 1969, it is one of the largest independents in the Southeast.

Though Raleigh, N.C., is one of the nation's fastest-growing metro areas, McKinney's biggest clients are from out of the region: Audi of America, Auburn Hills, Mich., worth $30 million in billings; and Royal Caribbean Cruise Line, Miami, worth $35 million.

CASHING OUT

Key executives at the agency include Robert Doherty, chairman-CEO; Lloyd Jacobs, vice chairman; and Pat Burnham, exec VP-creative director.

People familiar with the agency said Messrs. Doherty and Jacobs are nearing retirement and have been seeking a buyer as a way to cash out their large stakes in the agency.

It is believed McKinney would operate as an autonomous unit of CKS if a deal is done.

Separately, details of the pending Modem/True North deal, such as the headquarters location of the new company and management staff, have all been decided, said Jack Kraft, the former Leo Burnett USA executive acting as Modem's advisor in the negotiations.M

Contributing: Laura Petrecca, Debra Aho Williamson

In this article:
Most Popular