HMS Buys Pete Smith Advertising To Expand Minneapolis Operation

Seeking to expand its Minneapolis presence, HMS Partners last week signed a deal to acquire $7 million creative boutique Pete Smith Advertising. Terms were not disclosed.
Pete Smith’s 10- to 12-person agency will be merged into HMS’ Minneapolis office, said Rick Milenthal, vice chairman and chief executive officer of Columbus, Ohio-based HMS Partners. Tim Pearson will continue as managing partner of HMS in Minneapolis, while Smith will become the office’s executive creative director.
Milenthal positioned the acquisition as an “enhancement” of the office’s current creative staff and work. Adding Pete Smith will allow Minneapolis to continue as a strong creative resource for the HMS Partners network, Milenthal said. The Minneapolis office has teamed with Columbus on campaigns for American Electric Power and with the agency’s Miami office on Florida Lottery advertising.
The Minneapolis outfit dates to 1995, when HMS acquired and subsequently renamed the Chuck Ruhr agency there. In February, HMS sold a majority interest in its Miami office (formerly the McFarland & Drier agency, acquired in 1994) to office president Ric Cooper. The agency, which reported total billings of $193 million in 1997, said capital gained from that transaction would help fund expansion of its operations in the Midwest.
“I would say in the next two years our focus will be around the Great Lakes,” Milenthal said. “It would not be incorrect to say the focus will be in the Midwest and out of the Southeast.”
Milenthal said HMS plans to add in-store planning and design capabilities in Minneapolis by the end of the year. The changes will allow the office to be more aggressive in seeking new business, he said.
“Our intent is to have a growing agency in Minneapolis,” Milenthal said. “We think there’s
a big opening there.”
Founded four years ago, Pete Smith Advertising has handled work for Minneapolis-based Petters Warehouse District and Northwest Airlines. Smith had previously served as a copywriter and creative director at crosstown shop Martin/Williams.
HMS’ Minneapolis office was recently named agency of record for Grand Casinos in Plymouth, Minn. The office’s other clients include Dayton Hudson’s Target and Mervyn’s retail chains.