Digital M&A activity remains ‘frenetic’

Digital acquisitions in the design industry took another lurch forward this week with the news that Elmwood Design is hunting for a digital consultancy.

The acquisition plans come against a backdrop of digital deal-making, with three mergers and acquisitions taking place within the industry this week alone. Advertising network Publicis Groupe has acquired China’s largest independent digital consultancy, Communication Central Group, which will rebrand as Digitas Greater China. Zoo Communications has joined forces with design group DCG Media and interactive group Foster & Lisle, while brand consultancy Star Chamber is merging with research group and sister company Distillery.

These moves follow M&A industry growth expectations – particularly in the interactive sector – predicted in the latest survey by Willott Kingston Smith Results.

In June, the survey said that the marketing communications industry will continue to expect the strongest organic growth in the Web and interactive sector, in what is predicted to be a very active M&A market this year.

‘While we have digital capabilities, it would be good to have a digital hub,’ says Elmwood’s chairman Jonathan Sands. ‘We quite like the idea of bringing in a completely new infrastructure. We have grown with a single-minded culture and it will be nice to have people skilled on the digital side. We have never acquired before and our clients are putting more on-line. In terms of significant growth that is where it is.’

Zoo Communications, which offers packaging design, graphic and Web design, plus PR and advertising support, is to merge with brand and corporate design specialists DCG and Foster & Lisle, which works with Web design, build and on-line communications.

This deal has been structured as a purchase by DCG Media of Zoo and Foster & Lisle in exchange for cash and shares. The new consultancy will trade as Zoo.

According to Lars Clausen, owner of DCG and the group’s new chairman, ‘We will be looking to develop more in the travel, leisure and financial sectors, to further enhance our directories business and to strengthen our on-line capabilities.’

Digital movers and shakers
• Elmwood looking to purchase a digital consultancy, as well as open a New York office following new project wins in the US
• Zoo Communications, DCG Media and Foster & Lisle to join forces. Clients include Inbev UK, Philips Electrical, Christian Dior and Chanel
• Lars Clausen becomes chairman of the group and Jamie Bryant, owner of Zoo Communications, becomes chief executive. George Foster will head up the on-line division
• The Sandom Group’s brand consultancy Star Chamber and research specialists Distillery are to merge and rebrand as Distillery. Clients include: Allied Bakeries, Adnams, Scottish & Newcastle, Kellogg’s and ITV