WPP Group has bought Addison Design Company for up to 8.5m, the media giant’s first major design acquisition since bringing Coley Porter Bell on board in 1989.
WPP has paid an initial sum in cash and loan notes of 5.5m, to be followed by another 3m over the next five years, subject to Addison’s performance.
As part of the deal WPP gets the annual report and corporate literature group’s parent company Addison Investments.
Addison founder and principal shareholder Steve Smith becomes Addison’s non-executive chairman, while managing director Simon Lake becomes managing partner. All Addison’s senior managers have entered into what it considers to be long-term service contracts of six or 12 months.
“This is a great opportunity,” says Simon Lake of the deal. All Addison’s staff are staying on, he says, and the consultancy retains its name and will remain in its existing offices.
WPP already operates an annual report and corporate literature offer, Sampson Tyrrell Corporate Marketing, which is working for pharmaceuticals company Novartis and oil and gas company Lasmo, among others.
“Although, collectively, WPP’s design interests already make it the largest design business in the world, it has a relatively small presence in the specialised area in which Addison operates,” says Smith.
“This acquisition strengthens WPP’s presence in this area and enables Addison to build on its position as the market leader,” he adds. Addison’s operating profit for 1996 was 1m.
See News Analysis, page 8