Cordiant Communications said July 5 it had reached definitive agreement to buy marketing services company Lighthouse Global Network, Chicago, for $592 million in stock and debt.
London-based Cordiant said the acquisition would raise its North American revenue by eight percentage points to 35%, and boost its share of revenue from marketing services activities by 15 percentage points 47%. The company said the deal also should make Cordiant more attractive to multinational clients.
"The acquisition brings us two new high-growth business streams in design and branding and business communications, and adds critical mass to our existing marketing services operation," Cordiant CEO Michael Bungey said in a statement. "Lighthouse is another important step towards our goal of becoming one of the world's leading marketing communications groups and further enhances our value in a rapidly consolidating industry."
The company said it will issue 75 million new shares, with a value of $421 million, based on Cordiant's July 4 share price. It will assume $171 million in debt and preferred equity for Lighthouse, which itself had purchased 17 companies in the past year.
The purchase would move Cordiant from No. 13 to No. 11 among the world's top ad organizations, based on Advertising Age's latest ranking.
Lighthouse, which unsuccessfully bid for Burrell Communications, Chicago, last year, has 1,100 employees in 36 offices in six countries. It is owned by private investors and management.
No details were available regarding how Lighthouse would fit into Cordiant's network. The deal is subject to shareholder approval, with a vote taking place in late summer.
Copyright July 2000, Crain Communications Inc.