By Judy Warner and David Gianatasio
BOSTON–Arnold Communications has signed a letter of intent to be acquired by Cyrk Inc., a publicly traded sales promotion company, sources said last week.
Although the chief executives at both Arnold and Cyrk denied a deal was in the works for the acquisition of the $650 million advertising agency, industry sources confirmed that Cyrk, based in Gloucester, Mass., is the ‘nonadvertising agency’ that has been courting Arnold (Adweek, May 12). Barring any stumbling blocks, these sources said, a deal could be finalized within weeks.
Sixty-year-old Arnold chairman Ed Eskandarian has been candid about his desire to retire before turning 65. He wants to cash out of the Boston agency that in eight years he has built into the nation’s 21st largest. Arnold, with clients such as McDonald’s, Volkswagen of America, Fleet Financial Group and Nynex, reported revenues of $75 million in 1996.
A buyout of the agency by Cyrk would probably require Eskandarian’s involvement for the next three to five years, but fulfill his aspirations to be part of an integrated marketing company among the 20 largest agencies in the country, sources said.
A deal with Arnold would help Cyrk diversify outside the promotional products and services industry, where it has grown steadily over the last 20 years. Cyrk’s clients include Philip Morris and PepsiCo, for which it handles the ongoing Marlboro Gear and Pepsi Stuff customer loyalty programs, respectively.
In 1995, Cyrk was reportedly interested in buying Bozell, Jacobs, Kenyon & Eckhardt in New York. At that time, then Bozell Worldwide president and chief executive Chuck Peebler denied there were ‘ongoing discussions.’
Copyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED
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