It was 18 years ago that Rodney Fitch famously floated Fitch & Co, the first UK design consultancy to be listed as a public company. This week signals what could be the start of a new wave of design-related flotations, though this time it is not the retail sector, but digital media that is the driver.
The proposed listings of WPP-backed digital media consultancy Syzygy, and BSkyB-backed broadcast design specialist Static 2358 are perhaps unsurprising in the present business climate. But these are no flash, dotcom-style initiatives.
While both moves slot conveniently into the recent cycle of technology flotations, Syzygy’s listing on the Neuer Markt and Static’s on the London Stock Exchange will be the first flotations that the design sector can begin to claim for years.
In retrospect, the signs of flotation were always there for the pair. During the past year both companies have been through the motions of businesses which are looking to go public. Both announced publicly their intentions to go international. Both then acquired overseas offices: Syzygy by its takeovers of Paris Web group NetForce and Frankfurt/ Munich-based consultancy United Media; and Static by securing office space in New York and Paris.
According to Syzygy chief executive officer Chris Robson, “Unlike many of our competitors, Syzygy possesses significant experience in deploying pan-European solutions. Listing on the Neuer Markt will confirm our status as a leading European player, and will give us access to greater liquidity.”
Syzygy creative director Matt Bagwell says a new group structure will be created, with offices referred to by country, such as Syzygy UK. Whether a creative group structure will be set up remains to be seen, but Syzygy is set to launch a new identity, to be designed by a WPP-owned company.
For its international expansion Static 2358 is now seeking £40m-£50m in funding and plans to list 75 per cent of the company in London, worth an estimated £150m-£200m. Remaining equity will be held privately.
Static founder and creative head Mark Rock explains that the main motive is to raise funds and roll out services internationally. This will be spearheaded by the company’s interactive TV games channel PlayJam, which it aims to launch over the widest range of platforms and national boundaries.
“Now digital is rolling out across the world, the challenge is to create a brand that can work well in each different country,” he says. Static has also just signed representation in both Australia and Asia.
Aside from this the flotation, scheduled for before the end of the year, will not visibly change working practices in its London offices, Rock adds.
Ticegroup chairman Ian Cochrane says there are more digital media consultancies looking to float: “I certainly know a few people who are planning to do IPOs this year or next,” he adds.
Whether these cases mark a significant milestone for the UK design sector remains to be seen. With luck these will not be isolated cases. The surge in mergers (largely takeovers) of UK digital media consultancies is triggering a power shift towards the US and Scandinavia.
If it achieves anything, the flotations of Static and Syzygy will hopefully begin to redress what many still regard as the complacency of British businesses towards dominating the world digital scene.
Syzygy (founded in 1995)
30-strong Syzygy named BT/ Yell Web Agency of the Year
July – appoints Matthew Bagwell from Imagination to replace James Closs as creative director
July – launches Siemens e-commerce website MobileStore
November – launches Boots Men website and university information website Schoolsnet; also forms part of Richard Branson’s People’s Lottery consortium
Acquires NetForce of France and United Media of Germany
Reports combined group revenues for 1999 of EUR11.7m (£6.8m)
Employs 160 people in three countries
Plans to float on the German Neuer Markt
Static 2358 (founded in 1997)
May – wins a five-way pitch for Studio Universal identity
September – designs two screen idents for ONdigital’s UEFA
November – creates ident for National Geographic channel Adventure One
December – updates the Channel 4 screen idents
January – BSkyB takes a 10 per cent stake in the business
February – PlayJam, the satellite TV digital games channel, launches
March – partners with Saatchi & Saatchi for interactive TV advertising
May – prepares to float on the London Stock Exchange, with plans for £40m-£50m funding of international offices