Lee Garfinkel, Lowe/SMS co-chairman/chief creative officer, initiated the deal, seeking to bring Gary Goldsmith and his creative reputation into the agency.
A Doyle Dane Bernbach alum and winner of more than 150 awards, Mr. Goldsmith will become exec VP-executive creative director at Lowe.
SEARCH FOR TALENT
"This was a search for talent. Financials didn't drive the deal," Mr. Garfinkel said.
Founded in 1987, Gold-smith/Jeffrey had been approached by suitors before but hadn't been interested in a merger. The loss of its biggest client, Electronic Data Systems Corp. (see related story, Page 4), earlier this year put some financial pressure on the agency.
"Our regard for the commitment of Lowe/SMS to [our] same principles, coupled with its integrity and depth of resources, made it the ideal suitor for us," said Bob Jeffrey, who will become exec VP at Lowe and continue to manage most Goldsmith clients.
Terms of the deal weren't disclosed, but industry executives said it probably consists of long-term employment contracts for Goldsmith/Jeffrey principals and a small cash payment to offset shutdown expenses and existing financial obligations.
Goldsmith/Jeffrey reported billings of $50 million in 1995; nearly a third of that came from EDS. Industry executives estimated the agency's '96 revenue at $2 million to $4 million.
Goldsmith/Jeffrey's remaining clients include Pocket Communications; ESPN2 and ESPNews; Nynex Information Resources; and El Al Israel Airlines.