Even independent industry consolidators aren’t immune to acquisition: Chicago-based Lighthouse Global Network, Inc., last month was acquired by U.K. advertising agency Cordiant Communications in a stock deal worth $421 million.
The acquisition moves Cordiant, which had revenues of $544 million in 1999, closer to three major business goals by increasing the company’s revenues from North America, marketing services businesses, and multinational companies. The ad agency now derives 47 percent of its revenues from non-advertising services.
Formed in 1998 by former Omnicom executive Terence Graunke, Lighthouse has spent the last two years amassing a $159 million network of marketing services companies ranging from branding and design shops to sports marketing firms and promotion houses.
The plan was to build a network that could serve clients “from concept to consumption” – and attract enough interest from Wall Street to make a profitable IPO. “The market hasn’t been right, and this offer came along,” notes one source close to the proceedings. Graunke and most of Lighthouse’s other principals are not expected to remain with the merged company.
Joining Cordiant’s network should bring immediate benefits to Lighthouse’s Communicator division, which was formed through an alliance of the erstwhile Davidson Marketing promotion agency and a handful of other marketing companies (April promo).
For one, Cordiant will unite Chicago-based Communicator with 141 Worldwide, a London shop with expertise in promotion, direct marketing, merchandising, and sponsorship and a network of 60 offices in 43 countries. “We’ve been interested in developing more of a global offering for some time now, and this gives it to us instantly,” says Communicator ceo Jay Farrell. (Lighthouse’s acquisitions had focused exclusively on the U.S. and U.K.)
Farrell also likes the synergistic possibilities with Cordiant’s Bates Worldwide advertising unit. “We’re very focused on consumer research and understanding, and Bates comes from the same point of view,” he says.
Cordiant made two other acquisitions in June, buying technology branding specialist Donino, White & Partners, Atlanta, and London-based advertising and promotion house Arcom Group Ltd.