GGT Group is the minnow swallowing the whale, having won the bidding for BDDP Group, the world's 15th-largest ad operation.
Beating out Grey Advertising and WPP Group, London-based GGT will pay about $165 million for the Paris-based BDDP, which includes Wells Rich Greene BDDP, New York. GGT ranks No. 28 among ad groups.
GGT will buy a controlling stake from BDDP's institutional investors, who rescued BDDP in 1994 with a debt reduction plan after the agency floundered following a late 1980s expansion drive.
24% STAKE IN GGT
Two-thirds of the deal will be cash--some of which must be raised in public markets--and one-third in stock. BDDP shareholders will get a 24% stake in GGT.
BDDP's revenue in its last fiscal year, ending Dec. 31, was $220 million vs. GGT's $98 million for its last fiscal year, ending April 30.
About 75% of BDDP's 1995 billings of $2 billion come from the U.S. and France; WRG represents 40% of total billings.
GGT not only gains a New York agency but also a foothold with Procter & Gamble Co., a major WRG client. GGT's other U.S. shops are GSD&M, Austin, Texas; Martin/Williams, Minneapolis; and Brighthouse, Atlanta.
$2.4 BIL IN BILLINGS
The deal increases GGT's international presence. BDDP, with offices in 28 countries, is the No. 3 shop in France. Combined, GGT will have billings of $2.4 billion.
BDDP management backed GGT throughout the process.
"GGT will expect certain financial returns and quality of the work from BDDP. If we perform, they'll take a hands-off attitude," said Wells Rich Greene BDDP Chairman-CEO Frank Assumma.
Jean-Marie Dru and Jean-Claude Boulet, two of BDDP's senior managers, become executive directors on the GGT board. Walter Butler, president of the BDDP supervisory board and lead investor, becomes vice chairman.
The WRG client list includes Bristol-Myers Squibb, Chase Manhattan Bank and Heineken USA. One potential conflict is GGT client Cussons, a U.K. soapmaker that might concern P&G.
Contributing: Rebecca A. Fannin, Laurel Wentz, Bruce Crumley.
Copyright September 1996, Crain Communications Inc.