The move comes four months after the Tokyo company acquired a minority interest in Mendelsohn/ Zien Advertising, Los Angeles, as part of a global growth plan led by Tomokazu Jimbo, Hakuhodo's corporate executive officer in charge of global operations. (AA, May 19)
"This investment will give us a new office on each coast. We evaluated McCaffery Ratner's network, and its potential to grow in the East Coast market," said Mr. Jimbo. "We are doing this to handle the increasingly localized nature of our clients' business and in order to serve local clients."
Hakuhodo about one year ago approached Don Gilbert, founder of New York consultant Gilbert Taney Farlie, for help in finding a prospective partner. "They wanted a quality organization that had a good creative product, a management team with experience working at big agencies and with multinational accounts," he said.
McCaffery Ratner began in 1997 through the merger of two boutiques, McCaffery Ratner and Lane Gottlieb Advertising. Current clients include General Electric Monogram Appliances, Pennsylvania Power & Light, Olympus America and General Cigar Holdings; McCaffery Ratner management claims $100 million in billings. Neither Mr. Gottlieb nor Mr. Jimbo would comment on the dollar value of Hakuhodo's 49% investment or how the agency's remaining shares are divided.
Jerry Gottlieb-who left Backer Spielvogel Bates as an exec VP-managing director, multinational accounts in 1996, and teamed with Bill Lane, a longtime J. Walter Thompson creative director-said he and his partners have in the past two years recognized a need for a global connection in order to grow. Hakuhodo operates 64 offices in 17 countries and regions, and has over the past year invested in small-to-midsize independents in India, China, Malaysia, France, the U.K. and Germany. Already, McCaffery Ratner has met with several Hakuhodo clients, including Kobayashi Pharmaceuticals, Japan's ANA Group airlines and Hitachi, and new client relationships are being formed.
The agency will retain its name, with Mr. Gottlieb noting "we're continuing to be a majority owner in the agency, which means we continue to be in charge of our destiny."
Under terms of the deal, Mr. Gottlieb becomes McCaffery Ratner CEO and Bill McCaffery takes the title of president. Mr. Lane and Sheila McCaffery remain exec VP-creative directors. Sam Ratner, until now chairman-managing partner, will consult for the agency until Jan. 1. With Hakuhodo closing its New York service office, the agency hopes to add a handful of former Hakuhodo employees.
For the time being, Hakuhodo's U.S. acquisition appetite is sated. "We have no further plans to expand at the moment," Mr. Jimbo said. However, he added, "As I've been saying, this depends on the need of our clients."