The acquisition of AKQA, the largest remaining independent interactive agency, by WPP sent waves through the ad sector today. Read: the French Riviera was buzzin'.
Numerous senior agency people attending the Cannes Lions global ad festival have either worked for AKQA or competed with it dating back to its founding in 2001. The deal was long expected, so long in fact that it took many off guard who have grown used to the San Francisco-based agency being maybe-kinda-sorta for sale.
The issue widely assumed to be preventing the acclaimed shop from selling to a major holding company was, naturally, price. And playing the wallflower has clearly paid off for AKQA. Its sale of an undisclosed majority stake to WPP will value the company at a reported $540 million, per reports in The Guardian and others, a large figure for any marketing services business and a price that just barely edges out the $530 million Razorfish commanded when Microsoft sold it to Publicis in 2008. Of course that deal came with a reported $2 billion in guaranteed media spending on Microsoft properties, which may well push the value Microsoft extracted from the transaction beyond what WPP is paying for AKQA.
In a statement today, WPP said AKQA had gross assets of $282 million as of the end of 2011 and expects revenue of around $230 million this year, up some 21 percent over the $189 million it brought in last year. Investment firm General Atlantic owned 80 percent of AKQA, with the remainder held in part by founders Tom Bedecarre (CEO) and Ajaz Ahmed (Chairman).
In Cannes, AKQA Chief Creative Officer Rei Inamoto gave no hint of anticipation during a press conference this morning unveiling the winners of Lions in the Cyber category, for which he sat on the jury. In response to one journalist's question, he said, "There's been way to much focus on [cross-channel] integration. I see the shift from 360 degrees of communication to 365 days of connection."
Corporate integration? That's another story.
Meanwhile at SapientNitro's beach club, the news was felt particularly strongly. With AKQA crossing over to holding company ownership, SapientNitro is now considered by some the largest independent interactive agency (AdAge ranked it third in 2009), though its ownership by Sapient Corporation makes its status as an indie debatable.
An interesting upshot of the deal is that Bedecarre will become president of a new Silicon Valley outfit called WPP Ventures, exploring investment opportunities for the Dublin-based holding company. AdExchanger will follow up!
-By Zach Rodgers