The deal, the seventh since late December involving a shop over $100 million in billings, highlights two of the driving forces in the agency business. Acquiring companies have a keen interest in the West Coast, and the independents are feeling the pressure to have international connections.
END OF WEST COAST HUNT
"I'm kind of excited; it's been six or seven years that we've been trying to do something on the West Coast," said Frank Lowe, chairman and founder of Lowe Group, a London-based unit of Interpublic Group of Cos., which earlier this year struck deals to acquire New York agencies Angotti, Thomas, Hedge and William Douglas McAdams Inc.
Goldberg will continue to operate autonomously, but clients will gain access to Lowe resources in New York (Lowe & Partners/SMS), Richmond, Va. ( Martin Agency), and in 28 other countries-an opportunity that drove the agency to the negotiating table after only six years in business.
Goldberg was interested in Lowe's direct-marketing capabilities. Client Dell Computer Corp. is also a client of Lowe Direct, New York.
PRINCIPALS WILL STAY
All three name principals will remain-Chairman-CEO Fred Goldberg and creatives Mike Moser and Brian O'Neill, all with five-year contracts. A number of other executives also have similar contracts to remain.
"This is the only [suitor] I really felt had any respect, any admiration, for what this business is all about," Mr. Goldberg said.
The agency's biggest clients are Dell, Kia Motors America and Edy's/Dreyer's Ice Cream, collectively accounting for about half of its $175 million in '95 billings.
The agency recently won a creative assignment from fast-food chain Boston Market.
Lowe doesn't have an option to buy a larger stake, though Mr. Lowe said, "We have talked about it." He said he was quite happy to buy a "substantial" minority stake, noting that keeping agency principals in a position of ownership control is important.
Lowe client Mercedes-Benz and Interpublic client General Motors Corp. blessed the deal, Mr. Lowe said.
Contributing: Alice Z. Cuneo