IPG's Lowe Acquires Global Digital Agency Profero
In the latest play by a holding company to snatch up a global digital shop, Interpublic Group of Cos.' Lowe and Partners has acquired Profero.
Lowe will absorb the global agency, which has about 550 staffers, and rebrand it as Lowe Profero. The addition will boost the Lowe network to over 5,000 employees around the world.
Despite Lowe Profero's new place across Lowe's global network, the shop will continue to operate on one P&L and focus on building its operations in New York, London, China, Australia and Singapore. Profero Global CEO Wayne Arnold will continue to oversee the shop and remain in the top role for at least three years.
"Embedding digital talent and capabilities throughout our organization has been a key strategic priority for IPG," said Michael Roth, IPG chairman-CEO. "With the launch of Lowe Profero, [Lowe CEO] Michael Wall and [Lowe Chairman] Tony Wright, along with Wayne, are putting that approach into action. ... Coming into this deal, both agencies bring exceptional operations in high-growth markets; they have a strong track record of successful collaboration on major digital assignments; and the leadership teams have great chemistry with one another that clients can feel."
The acquisition follows Interpublic's move last summer to merge two of its agency brands, Lowe and Campbell Ewald, and open an office for the unified shop in New York. The new office helped strengthen the U.S. hub for Lowe and also effectively untied the alignment Lowe had with Deutsch in the U.S. -- an experiment that didn't work out. Lowe was also closely aligned with IPG digital agency Huge at one point. Lowe Campbell Ewald will move into Profero's building in New York.
Profero was founded in London in 1998 by Mr. Arnold and his brother Daryl. Unlike most global agencies, it launched in Asia before coming to North America in 2008. Its North America operations since 2010 have been under the leadership of Aaron Reitkopf. Profero's international-growth goals became more obvious in 2013, when the shop announced that Mr. Arnold would permanently relocate to Singapore from New York.
Messrs. Arnold and Wall said their shared client roster and a desire to improve digital-content capabilities largely drove the union. Shared clients include Danone, Unilever's Omo and Tresemme brands, PWC and Diageo.
"We know each other well, we work together seamlessly and we both believe in and understand the benefits of a complementary and integrated advertising and digital offering," said Mr. Arnold in a statement. "Digital sits at he core of all future advertising."
But the deal really started over tea and biscuits at Gary Stolkin's office in London. Mr. Stolkin, CEO of The Talent Business, had persuaded Mr. Arnold to meet Mr. Wall at his office in London to talk about a potential tie-up. The British CEOs already knew each other from the London ad scene and, Mr. Arnold agreed to make a pitstop in London on his way from New York to Singapore the next morning.
The deal is one more sign that M&A isn't slowing down after a busy couple of years in adland. Profero, as one of the remaining digital networks with a global presence and consistent growth (its 2013 revenue grew 10% and profit grew 20%), was an M&A target.
For IPG, Profero marks the 13th acquisition since January 2013. Profero and the Interactive Avenues deal in India in early 2013 are the company's two largest acquisitions in the past 12 months. Among IPG's other purchases in 2013 were Sprung (U.S.), Preview Propaganda (Brazil) and UXUX (U.S./Netherlands).
Publicis Groupe is perhaps the most aggressive holding company when it comes to digital acquisitions, and the French company has continued its spree despite its planned merger with holding company giant Omnicom. Over the past few years, Publicis has bought Razorfish, Rosetta and Rokkan, among others. WPP also has made its share of digital agency acquisitions over the past couple of years. The holding company's most significant recent purchase was last summer's,AKQA deal. And Japanese holding company Dentsu bought media agency network Aegis last year as it continues to expand beyond Asia.
Profero had,also been acquisitive on its own. In 2012, the agency bought a majority stake in New York-based Hispanic agency Vox Collective. In early 2007, it bought Blue Flying Fish, a Shanghai-based advertising and media sales company.