20m buyout by Siegel & Gale

Siegel & Gale has announced its long-mooted management buy-out from Saatchi & Saatchi for 20.4m, forming the world’s biggest independent brand consultancy, with 275 staff.

Some form of MBO has been on the cards for about ten years (DW 5 June).

New York private investment firm Vestar Capital Partners has agreed to provide equity to finance the buyout alongside the new management owners. Completion is due towards the end of this month.

The group, which has offices in New York, Los Angeles and London, plans to grow further through acquisition and to focus on its Internet activities.

“The verbal, visual and behavioural aspects of branding grow ever more critical to marketing on the Web and indeed in all communications,” says founder Alan Siegel. “The management buyout will enable us to enhance our singular strengths in these areas to expand the global reach of our business.”

Under the deal, Siegel remains as chairman and chief executive officer, while managing director Scott Lerman becomes president, taking over from Kenneth Morris who is leaving the group.

London managing director Peter Gilson expects the group to grow through acquisitions in the UK and the Continent.

“I hope to do something towards the end of this year… certainly in the UK, possibly in Germany,” he says. He is looking at the Net and corporate identity area.

A spokesman for Bob Seelert, chief executive of Saatchis, says: “S&G is a cracking company but it’s not core to Saatchis’ activities.” The group will not be replaced.

S&G had pre-tax profits for the year to December 1997 of 2.06m. Its clients include AT&T, Citibank, Ernst & Young,

IBM, Kodak and Morgan Stanley Dean Witter.