Omnicom Discloses Cost of Organic Acquisition

NEW YORK Omnicom’s deal for Organic cost about $106 million, according to a 10-K financial report filed with the Securities and Exchanges Commission Thursday.

The New York-based holding company bought all of the San Francisco-based interactive shop’s common stock from private equity investment firm Seneca last December. According to the financial statement, the transaction called for Omnicom to redeem $99 million of its preferred stock in Seneca and assume $7.2 million in liabilities.

In 2001, Omnicom transferred its i-shop investments, including a 17 percent stake in Organic and a 35 percent stake in Agency.com, to Seneca in exchange for preferred stock in the firm. Seneca eventually assumed 100 percent ownership in Organic and Agency.com by purchasing their remaining shares and taking the publicly traded companies private.

Last June, Omnicom CFO Randall Weisenberger expressed the company’s interest in buying Organic and Agency.com from Seneca [IQ Daily Briefing, June 12, 2002]. Agency.com has yet to be purchased by Omnicom.

In acquiring Organic, Omnicom expands some of its existing client relationships. One of Organic’s biggest accounts is DaimlerChrysler, an Omnicom client. Organic also shares Tommy Hilfiger, Washington Mutual and Reebok, among others, with Omnicom’s general-market advertising agencies.