The long-expected sale of the agency also marks the departure of its co-founders, John Kelley and Carol Griseto, who have spent the last year looking for a suitor for the agency they launched in 1994, an Upshot spokeswoman said.
'Pursue other opportunities'
Mr. Kelley and Ms. Griseto
"After building the agency and running their own show, they wanted to move on and do something else," said the spokeswoman. "John has been solely focused in the last year on looking for the right buyer."
Mr. Kelley left the helm of Upshot for a brief stint as CEO of parent Halo, but he returned in March 2001 to find the agency a new home.
No new CEO
Upshot will continue to be run by President Brian Kristofek, who will report to Equity Chairman-CEO Don Kurz. A new CEO will not be named, an Upshot spokeswoman said.
Halo's financially troubling 2000 -- marked by a net loss of $50 million on $715 million in revenue -- prompted the company to begin negotiating the sale of its various marketing-services divisions in order to focus on its core promotional-products division, Halo Branded Solutions.
In the spring of 2001, Halo sold teleservices unit Market USA, Des Plaines, Ill., for $32.5 million and brand-identity packaging company, Northbrook, Ill.-based Lipson, Alport, Glass & Associates, for $25 million.
But those transactions were not enough to rescue Halo, which filed for Chapter 11 in July, seeking protection for its core promotional-products business and its Lee Wayne subsidiary. Upshot was excluded from the bankruptcy filing because it operated as a separate entity and was financially viable, according to the company.
Court approval needed
Terms of the Upshot sale, which is pending approval in the next 30 to 60 days from U.S. Bankruptcy Court of the Northern District of Illinois, were not disclosed.
But Halo President-CEO Marc Simon hopes the deal will help the beleaguered company get back on its feet.
"The divestiture represents another important step for Halo," Mr. Simon said in a statement. "With our restructuring largely completed, the closing of this transaction will allow us to turn our attention to the terms of Halo's emergence from Chapter 11."
Upshot employees to remain
The roughly 150 Upshot employees-based in Chicago and the agency's Richmond, Va., direct-marketing unit, will remain, the spokeswoman said, as will the Upshot name. "Once the deal is closed we'll look at the entire corporate structure and how we'll continue to operate on our own," she added.
Equity's core business is producing promotional premiums. Its biggest client, Burger King Corp., is currently looking for a second premiums vendor to serve its large global operation. Upshot, specializing in promotional, event, direct and marketing services, does not have premiums capabilities.