Hakuhodo DY Holdings Acquires Digital Kitchen

Latest Addition Helps Build Japanese Holding Company's U.S. Presence

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Michael Birkin
Michael Birkin

Kyu, part of Japanese holding company Hakuhodo DY Holdings, is acquiring digital content and design shop Digital Kitchen.

Financial terms of the deal were not disclosed, but Digital Kitchen's management team of Chairman Paul Matthaeus, CEO Bill Fritsch and President Don McNeil will remain in place.

The shop will join consultancy SY/Partners and branding agency Red Peak Group, both U.S.-based shops, under the umbrella of Kyu, a marketing-services division created in May 2014 after the acquisitions of Red Peak and SY. Hakuhodo appointed Michael Birkin, former Omnicom group vice chairman, to oversee the new division, formed in part to diversify its portfolio beyond Japan. The holding company's other agencies include creative agencies Hakuhodo, Daiko and Yomiko Advertising and media-services agency Hakuhodo DY Media Partners.

"We have admired Digital Kitchen for some time," said Mr. Birkin in a statement. "They have created a unique offer. They combine the roles of strategic advisors and content makers in the way they build brands for their clients. This ability comes from their heritage and experience in both entertainment and content marketing and, most importantly, from their DNA of producing and making what they conceive. I'm thrilled they will become a key partner in the Kyu collective."

Twenty year-old Digital Kitchen, with offices in Chicago, Seattle and Los Angeles and has 120 employees, has worked with AT&T, Microsoft's Internet Explorer and Bing, Bose, the Cosmopolitan hotel in Las Vegas, and also created the main title sequence for Showtime's "Dexter."

"We were founded on the firm belief that the greatest leverage in communications is the ability to connect emotionally," said Digital Kitchen Founder and Chairman Paul Matthaeus, in a statement. "HDY's philosophy of sei-katsu-sha–creating for the 'living person'– truly matches that. What's more, Michael's plan to create a collective of carefully selected companies with global reach allows us to grow faster while preserving Digital Kitchen's unique culture."

Hakuhodo DY Holdings is the eighth-largest agency holding company in the world, according to Ad Age's Agency report, with 2014 revenue of $1.9 billion. It's the second-largest network in Japan behind Dentsu. Digital Kitchen's 2014 revenue was $19.2 million, according to Ad Age's DataCenter.

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