"We've been actively looking for the past six to eight months to expand into the U.S. through acquisitions," said Mr. Lessard. "We've said that is our plan and that's exactly what we're doing. We want 100% control, and will acquire through a mix of cash and shares. But we are not at all interested in being bought or becoming part of a U.S. or international agency."
Cossette, Canada's largest independent, posted $74.3 million (U.S.) in gross income in 2000, up 17.5%, on billings of $496.5 million, according to Advertising Age figures, placing it second to McLaren McCann Canada, Toronto. Cossette's clients include McDonald's Corp., Coca-Cola Co., General Motors Corp. and Molson Brewing.
Mr. Lessard wouldn't name which U.S. shops are being eyed for purchase. But the agency's strategy is two-fold: to leverage opportunities being created by Canadian clients expanding into the U.S. or already doing business there; and to grow its relationships with its current multinational clients such as GM, Nike and Coke.
To date, the only U.S. agency Cossette is working with is Cramer-Krasselt of Milwaukee, with whom it shares the Bombardier Ski-Doo and related clothing and accessories account.
Other Canadian agencies have been trying to get a foothold in the U.S. since the late '90s. Envoy Communications Group, which owns Hampel/Stefanides in New York, is trying to piece together the next-generation ad agency and made a run at Leagas Delaney last November. That deal, however, appears close to dissolution, in part due to a drop in Envoy's share price. Leagas apparently is now negotiating with other
suitors, an executive close to the situation said.
Also looking south is MDC Communications Corp.'s Maxxcom, Toronto. In January, it bought 49% of Crispin Porter & Bogusky, Miami; it already owns Colle & McVoy, Minneapolis, and Margeotes/Fertitta Partners, New York.
Cossette is 80%-owned by about 40 company employees, with control in the hands of eight senior executives, including Mr. Lessard, one of the original partners in the firm founded in 1972. In 1999, Cossette underwent an initial public offering that netted gross proceeds of more than $28.4 million-funds designated largely to make acquisitions in Canada and the U.S.
The agency's current market capitalization is $55 million; as of April 20 its stock was trading at $9.70. It had a 52-week high of $12.16.
In November, Ian Saville, Cossette Toronto president, became senior partner-corporate development, charged with focusing on U.S. acquisitions. So far, however, most of the acquisitions have been in Canada: Pulse Marketing, of Halifax (now Cossette Atlantic), and Koo Creative, Vancouver, which merged with Cossette design company, Grapheme.
Cossette has offices in Quebec, Montreal, Toronto, Halifax and Vancouver, and a public relations office (Optimum) in Washington. It serves nearly 400 clients through its "convergent communications" services that include advertising, media, direct marketing, sales promotion, database marketing, interactive services, PR, sponsorship, research, graphic design and branding.
Contributing: Alice Z. Cuneo