NEW PARENT WANTS ARNOLD TO GROW: SNYDER'S $12O MIL ACQUISITION SETS STAGE FOR U.S. AND INT'L EXPANSION

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Snyder Communications acquired Arnold Communications, Boston, for $120 million in stock, giving the Bethesda, Md.-based marketing services company an agency known for its "Drivers wanted" campaign for Volkswagen of America.

Ed Eskandarian, chairman-CEO of Arnold, said the deal will allow Arnold to grow on the West Coast and internationally.

"They're encouraging us to build and grow our company," said Mr. Eskandarian. "It's not an ending of Arnold. It's a beginning."

Arnold also has full-service offices in Richmond, Va., and Washington, as well as 11 regional offices in the U.S. and Canada. The agency has been at a disadvantage in recent pitches because it lacks a West Coast office.

"We were impressed with the depth of talent at Arnold," said Daniel M. Snyder, Snyder chairman-CEO. "We looked at several organizations, and Arnold was unparalleled. They surpassed our expectations, and we're delighted to get together with them."

NEW PHARMACEUTICAL UNIT

Executives familiar with Arnold said the agency also plans to create a direct-to-consumer pharmaceutical ad unit within its shop.

Snyder last week also bought pharmaceutical marketing services company Publimed Promotions SA, Paris, for $48 million.

Mr. Eskandarian said he felt Snyder was the right fit because of its diverse marketing depth and integration.

"They're really different than the Interpublics and Omnicoms of the world," he said, noting that Snyder is not anchored in the ad agency world the same way as most big agencies. "That's what attracted us to them."

This acquisition is part of a trend in which non-agency-specific companies are acquiring mainstream ad agencies. For example, CKS Group bought McKinney & Silver, Raleigh, N.C., and direct-marketing agency Draft Worldwide acquired Adler Boschetto Peebles & Partners, New York, now ABP/Draft Worldwide.

`CLASSY' ENTRANCE

"Snyder gets into the advertising [business] in a classy way," commented Alan J. Gottesman, managing director at West End Consulting.

Snyder has at least one board member with a high profile in advertising: Phil Guarascio, VP-general manager for marketing and advertising, North American Operations, at General Motors Corp.

Arnold's billings for 1997 were $753 million, with revenues at $91 million, according to the agency. At a price one and one-third times its revenues, industry observers said the agency sold for a healthy premium.

CLIENTS INCLUDE VW, BIG MAC

Other than VW, Arnold's clients include regional McDonald's Corp. business, Fleet Bank and Century 21 Real Estate Corp. Arnold recently acquired Houston Herstek Favat, also Boston; its clients include Converse and Massachusetts Department of Health.

Snyder has database marketing, direct marketing, telemarketing, and sales and marketing outsourcing capabilities in industries such as package goods and pharmaceuticals.

The Publimed acquisition, said Mr. Snyder, "is a natural extension for us," translating to more global strength in the pharmaceutical sales and marketing arena.

In December, Snyder acquired Blau Direct, Wilton, Conn., and in March, Brann, Gloucester, U.K.

Mr. Snyder has his sights on offices or agencies in California, Texas and Illinois.

Contributing: Mercedes M. Cardona, Jean Halliday.

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