Frankel Goes Global via Publicis
Frankel & Co. plans to invest in global expansion and new technology following its purchase last month by Publicis SA.
Paris-based Publicis will pay a reported $150 million in cash for Frankel in the first stop on an aggressive shopping trip for U.S. businesses this year.
The cash infusion gives Frankel the means to pursue its Vision 2003 growth plan. The agency’s four objectives are to invest in technology projects, expand internationally, work with top multinational clients, and substantially raise billings and revenues of $95 million for fiscal 2000, ended Jan. 31.
“The decision to position Frankel for future growth by aligning with a strong global partner was not an easy one,” says Frankel chairman and founder Bud Frankel. “But the more I talked with [Publicis chairman-ceo] Maurice Levy, the more I became convinced it was the right one.”
Publicis was among seven or eight suitors for 38-year-old Frankel. Other reported finalists were advertising giants WPP and Omnicom.
Frankel flirted with going public for nearly two years, but abandoned the idea when Wall Street toughened up on marketing communications stocks.
The agency keeps it name, operating independently from Publicis’s U.S. operations including Publicis Dialog, a New York-based integrated communication and sales promotion division. Promo shop Gramercy Group, New York City, was folded into Publicis Dialog when Publicis acquired the agency last fall (December promo).
Frankel was named promo’s Agency of the Year in 1997 after earning an unprecedented encore at the top of the promo 100 that year. It ranked 12th on the promo 100 in 1999 and was the sixth largest agency in 1998 revenue with $85.6 million, representing two-year growth of 28 percent. Clients include McDonald’s, Visa, United Airlines, Target, and Frito-Lay.
Publicis, with worldwide revenues of $6.9 billion ($1.5 billion in the U.S.), has been on a stateside acqusition tear. Besides Gramercy, it recently bought p.r. firm Selz/Seabolt, Chicago, ad shop Evans-Group, Seattle, and a 49-percent stake in African-American ad agency Burrell Communications, Chicago. Publicis also owns Hal Riney & Partners, San Francisco.
“We are delighted that Frankel has selected us as their partner,” says Levy, citing the agency as “the pioneer and leader in marketing services and strategic promotions programs.”
