Publicis announced an agreement June 4 to buy EvansGroup, Seattle, an agency with $350 million in billings, just weeks after it acquired San Francisco's Hal Riney & Partners for $42 million, with the possibility of the deal reaching $55 million if revenue goals are met, according to executives who have seen the documents. But that may not be the end of the French holding company's search for U.S. marketing shops.
NOT NEGOTIATING YET
Asked if other American acquisitions were being planned, Maurice Levy, Publicis' chairman-CEO, said he was "in contact, but not yet negotiating" with other U.S. companies.
Publicis has been seeking U.S. acquisitions since the breakup of its joint venture with True North Communications last summer. The search became more urgent after Publicis failed in an attempt to take over True North. Although he said he's not in a rush to build the U.S. network, Mr. Levy acknowledges the agency must continue to grow.
U.S. NO. 2 FOR PUBLICIS
The acquisition of EvansGroup -- whose clients include Hewlett-Packard Co., PetSmart, United Healthcare, Washington State Lottery and 2002 Salt Lake City Winter Olympic Games -- makes the U.S. Publicis' second-largest market after France, with $1.4 billion in billings. One investment banker estimated the price between $25 million and $30 million.
Evans will merge with Publicis/Bloom, New York, creating an agency called Publicis with $700 million in billings and headed by Chairman-CEO Robert H. Bloom. Riney will operate independently. Mr. Levy said there were no client conflicts. Publicis is also using its new acquisition as the launch pad for an integrated marketing operation, Publicis Dialog. The unit will operate in all U.S. cities where Publicis now has offices, except Atlanta and Chicago.
Already established in France, Germany, the Netherlands and the U.K., Publicis Dialog seeks to "provide below-the-line answers to clients in function of their problems and needs, rather than in a single below-the-line specialization," Mr. Levy said.
Forming Publicis Dialog will allow Publicis to group all U.S. direct marketing, technology and public relations functions.
Jon L. Johnson, now president-CEO of EvansGroup, will head Publicis Dialog. Andy Hopson, president of Evans Public Relations, will be president.
Mr. Johnson said Publicis Dialog expects to grow revenue from $25 million to $100 million in two years, primarily through the acquisitions.
SELL OR GET STEAMROLLERED
The acquisition of EvansGroup -- with offices in Seattle, Salt Lake City, San Francisco and a service office for Hewlett-Packard in Boise, Idaho -- provides Publicis with better coverage without much overlap. Riney has offices in San Francisco, New York, Chicago and Atlanta, while Publicis/Bloom is in Dallas, Indianapolis and New York.
Mr. Johnson said he sold out not for cash, but because of the wave of global consolidations sweeping the industry.
"If you don't join in on that crowd, you could get steamrollered," he said.
Contributing: Alice Z. Cune