Strawberry Frog Seeks a Princess
NEW YORK (AdAge.com) -- He's selling. He's not selling. He's
Strawberry Frog founder and CEO Scott Goodson has had a few different takes on whether his agency is on the block. In March he told Ad Age he'd been talking with "all different forms of investors"; in June he told Adweek that Publicis Groupe was one of his suitors; this week he told Ad Age via e-mail, "I cannot confirm that we are in talks with anyone, nor have I confirmed this in the past, despite what has been reported in the press."
Shortly thereafter, however, Ad Age received a call from Val Zammit, a mergers-and-acquisitions consultant hired by the agency to investigate a sale. He definitely seemed to think an acquisition was in the cards. Despite the reports of several sources who told Ad Age that Maurice Levy's Publicis Groupe had backed off, Mr. Zammit also insisted it was still the French holding company that is primed to swoop for the Frog.
The Publicis card
"One of the alternatives was Publicis. Publicis has expressed interest in doing a deal with Strawberry Frog, for many reasons that you can imagine. The reality is they are still interested. I arrived back from Paris yesterday and while I was there I did speak with a Publicis representative, and there continues to be interest. So this thing about them wanting to pull out is patently untrue."
Mr. Goodson confirmed Mr. Zammit is on retainer for Strawberry Frog. A spokesman for Publicis Groupe declined to comment.
One executive inside Publicis Groupe and two former Strawberry Frog employees said negotiations stalled during due diligence this summer. Chief among the problems, said a former Frog, were discrepancies between claims about the agency's revenue and what is on the books. Mr. Goodson said there are no discrepancies and that he was unwilling to discuss the shop's "private" books.
In June, reports circulated that the New York and Amsterdam offices handle accounts valued at $250 million in media billings. To date, however, the New York office handles creative duties for Sam's Club, Unisys Corp., Foster's beer, Jump shoes and Mega Brands toys along with project work for Microsoft, Well-Point, A&E and Scion broadband, which collectively represented less than $40 million in media billings in 2006, according to TNS Media Intelligence.
Since the $250 million estimate, the Amsterdam office has won launch work for a Vauxhaul vehicle called Agila -- which could spend as much as $100 million on media in the coming year -- and for a Barilla snack line called Freelers Pavesi. That office also handles work for Sara Lee coffees, Asics' Onitsuka Tiger, Warsteiner beer, Life Mobile and pan-European duties for Panasonic.
A person close to the agency placed revenue for the two offices at less than $12 million and claimed profit was down partly because of the agency spending heavily to pitch car accounts such as BMW's Mini, Volvo and Hyundai in the past couple of years. Mr. Goodson said profits have actually increased by 30% this year.
Strawberry Frog gained notoriety as one of the first hot creative shops to open in Amsterdam and for its ability to pull in clients such as Mitsubishi and Heineken despite its relatively small size.