TRUE NORTH TAKES MULTICULTURAL LEAD: WITH COLEMAN DEAL, DIVISION'S BILLINGS NOW TOP $200 MILLION

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True North Communications' acquisition last week of a 49% stake in Don Coleman Advertising creates the largest multicultural agency network in the U.S.

With Coleman, the country's third-largest African-American agency, TN also becomes the first agency holding company with full-service black, Hispanic and Asian-American marketing capabilities. It edges out Young & Rubicam, which owns Bravo Group, Kang & Lee and YAR Communications and had been in discussions with UniWorld Group, the No. 2 black-owned agency.

Executives close to the situation said talks between Y&R and UniWorld had cooled.

NEW AMERICA

Coleman becomes the cornerstone of TN's New America Strategies Group, a year-old multicultural unit that now has $200 million in billings.

"We're demonstrating our commitment to make certain that each time we have a strategy for our clients, we will have a multicultural, integrated [strategy]. Not black, not Hispanic, not Asian," said Valentine Zammit, CEO of True North Diversified Cos., under which the New American group falls.

"There is no other group that has all three legs of the stool like we do," he said.

Financial terms of the Coleman deal were not disclosed, but generally agencies sell for about 1.5 times revenue, which in Coleman's case would be $13 million for the minority stake. Coleman's billings are estimated at $137 million, according to Black Enterprise.

The other agencies comprising TN's New America Strategies Group include Siboney USA, which serves Hispanic consumers; Imada Wong, a non-equity affiliate dedicated to Asian-Pacific American markets; and Stedman Graham & Partners, True North's other black agency. Top executives from all three shops will sit on the New America Strategies Group board as part of a newly created office of the chairman, as will Al Schreiber, New America Strategies Group's managing partner.

INTERNET EXPANSION

Mr. Coleman, named chairman-CEO of the group, said he wanted to expand its work in public relations, promotions and the Internet, but would give no specifics. He will remain president of Don Coleman Advertising and continue to be based in Southfield, Mich., but will spend at least one day a week in New York, home to TN Diversified Cos., whose board he also joins.

Coleman, an 11-year-old shop, is the country's No. 3 black agency behind No. 1 Burrell Communications Group, Chicago, which sold Publicis a 49% stake three months ago, and UniWorld, New York.

There are potential conflicts in the TN/Coleman marriage. The Graham agency handles J.C. Penney Co., while Coleman has Kmart Corp. Mr. Coleman said he had cleared the new alliance with clients.

Mr. Zammit noted the same firewall between True North's non-ethnic agencies would separate the multicultural ones.

"It's nothing different than Bozell and [Foote, Cone & Belding]. One has Bank of America; the other has Chase," he said.

Agencies are eager to buy leading minority shops because clients increasingly are aiming for minorities' disposable income.

$1 TRILLION IN BUYING POWER

"If you combine the buying power of African-Americans, Hispanics and Asian-Americans, you're talking about over $1 trillion in buying power," Mr. Coleman said.

He said TN is taking an active role in ethnic marketing because marketers' attention to minority buyers is bound to increase.

"It's becoming a primary focus and not just an afterthought," Mr. Coleman said.

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