Five years after its founding, Gut is selling a majority stake to global tech and digital consultancy Globant.

Though terms were not disclosed, the deal marks one of the most remarkable acquisitions of the year, given that Gut has become a standout creative shop in the industry since its launch in 2018. It was named Cannes Independent Agency of the Year in June.

For Gut, the deal offers the 500-person agency scale and increased capabilities to compete in an increasingly digital and tech-oriented environment while Globant gains an agency with strong creative chops time during a time when consultancies are looking to up their game.

“The same way that our full independence was key for our first five years to get where we are today, we feel that this partnership will be key for us to get to where we need to be in five years,” said Anselmo Ramos, co-founder and creative chairman of Gut.

Coming off its Cannes recognition, where it won Agency of the Year, Independent Agency of the Year and Independent Network of the Year, Gut received several other offers, said Gaston Bigio, co-founder and creative chairman of Gut, in an interview. The agency declined to disclose revenue.

“Everyone wanted to make Gut a part of themselves, to fuse our services, our talent to make another company better at doing the same thing,” Bigio said. “This is not that. The idea is how we can complement ourselves and how we can take the Gut brand to the next level.”

Scale and tech chops

“Gut will grow inside a lot of Globant’s buildings in the countries that we aren’t in,” said Bigio. “Now we can open an office quickly in London, or in Asia.” But perhaps more importantly, it also offers capabilities on the digital and tech side, which Bigio said is “clearly not a strength” for the agency.

“No matter how disruptive we want to be in the digital area, there's a lot of lack of tech and digital capabilities in Gut right now that we want to improve,” Bigio said. “ And taking that to the next level, it's about more than just hiring digital and tech talent.”

Globant, which reported $545.3 million in third-quarter revenue, announced earlier this year that it would invest $1 billion in building an artificial intelligence hub in São Paulo. Its plans include hiring over 20,000 employees in the region over the next five to six years. Globant currently has 27,500 employees across 30 countries and has clients such as Google, Electronic Arts and Santander.

Globant was recently named the exclusive official digital transformation and tech solutions partner for Major League Rugby. Last year, Globant was named the digital transformation partner for the Los Angeles Clippers.

Globant has been a Gut client for three years. This year, Gut won Ad Age’s B2B Campaign of the Year award for a campaign it helped launch for the tech company.

Independent spirit

Ramos emphasized that Gut will operate on its own and keep its brand name. Miami-based Gut currently has employees spread across seven offices in Miami; Buenos Aires, Argentina; São Paulo, Toronto, Mexico City, Los Angeles and Amsterdam. Its current roster of 60 clients globally includes Anheuser-Busch InBev, Mercado Libre, Google, Kraft Heinz, Coca-Cola and Tim Hortons.

Gut will report financially to Globant, whose shares closed at $216.71 on the New York Stock Exchange on Monday.

“Even though we are now part of a public company and proudly part of Globant and public, our independent spirit is the same,” Ramos said.

Globant brought up the idea of buying Gut a year ago, Bigio and Ramos said. Bigio said he and Ramos had to reimagine their goal for the agency, which is to become a “top five global creative network.”

In 2018, Ramos expressed a goal for Gut to win independent agency of the year at Cannes by 2022, a goal it achieved this year. (He also said at that time that he was starting Gut “to be independent forever.”)

“We think that this is a massive opportunity to create a unique offering that is going to be a blend of these two universes,” said Patricia Pomies, Globant’s chief operating officer, noting that Globant has been looking for ways to expand what it can offer clients by offering more creative-related solutions. While this won’t just include marketing efforts, Gut will be able to help across different areas such as product launches and business transformation.

Globant has been acquiring agencies for the past couple of years, including marketing and advertising agencies such as Spain’s Habitant, Denmark’s Vertic, Columbia’s Ad_Bid and Mexico’s KTBO.

Latin roots

Globant’s roots also were a key factor, the Gut founders said. Globant was founded in Buenos Aires in 2003 and now has its headquarters in Luxembourg.

“We want to show that a Latin company powered by another Latin company can be one of the top five networks of this world,” Bigio said. “And that is a very big challenge and it's a renovation of our dream because our dream was accomplished this year.”

Globant has been acquiring agencies for the past couple of years, including marketing and advertising agencies such as Spain’s Habitant, Denmark’s Vertic, Columbia’s Ad_Bid and Mexico’s KTBO.

The industry has also seen consultancies build out their own communications and creative services businesses and hire agency executives as a way to merge the two worlds. Some of the largest ones include Deloitte Digital and Accenture Song, previously known as Accenture Interactive, which made waves across the industry when it acquired Droga5 in 2019. Now Droga5’s founder is leading Accenture Song as CEO. Another large consultancy TCS, hired former Droga5 CEO Andrew Essex to lead its digital services business.

“We have been seeing these kinds of moves happening,” said Pomies. “But in this case, we have something very unique.”

The Gut deal is one of several notable acquisitions in the industry this year. Small agencies Majority and L&C sold minority stakes to WPP and Serviceplan, respectively. Stagwell just acquired Movers + Shakers, an agency that had become one of the innovators of marketing on TikTok. Omnicom likely had the largest acquisition of the year when it agreed to pay $835 million for digital commerce company Flywheel Digital last month.