Loewy, the acquisitive marketing services network, will today sign a cash and equity deal to acquire public sector branding specialist The Team (pictured), Design Week can reveal.
Loewy is to absorb a 100 per cent stake in the consultancy, netting The Team’s management shares in Loewy and an undisclosed cash sum.
Charlie Hoult, chief executive of Loewy, says that the network remains acquisitive and further ‘complementary mergers’ are on the cards. The deal builds on Loewy’s acquisition at the end of last year of Williams Murray Hamm.
Hoult declines to reveal the financial details of the arrangement with The Team, but says that it is ‘structured with a lot of paper’. The tie-up has been in discussion for over a year and was initiated and ‘steered’ by Harvest Consulting.
‘The exchange of equity is the spirit of this [deal]. Business as usual for the group is very important; it is not a clunky, structured deal,’ says The Team managing director Julian Grice.
Grice says that The Team has received a number of approaches over the years, but claims the tie-up with Loewy offers business growth opportunities in new sectors and territories, combined with a mix of ‘like-minded people’.
‘We have seen where these kind of deals can go wrong: when they’re done for numbers reasons or when people want to get out early, for example,’ he says. ‘We are not in the business of risking our loyal customers by becoming part of this group. The industry needs different business models. It did [integrated agencies] in the 1990s, but there were casualties trying to bring people together.’
Hoult’s strategy is to continue to build Loewy as a ‘hybrid federation’ of consultancies, offering a ‘diverse and varied’ combination. ‘It is not just a portfolio play or umbrella structure and we don’t have mechanisms for cross-selling as such, but we are being asked to pitch for client work which is more multifaceted. We now have a leading Whitehall communications specialist in The Team and a leading packaging design consultancy in Williams Murray Hamm,’ says Hoult.
• Clients include the NHS, London 2012, London Development Agency, Lloyds TSB, Microsoft and Government departments across Education, Health, Work and Pensions, Trade & Industry and the Home Office
• Partnership management structure, where members are shareholders
• Structured around five practices, each led by a client partner: corporate branding, marketing communications, internal and change communications, employer branding and digital communications