Boston Shop Sold; Eskandarian to Stay for 3 Years
BOSTON--Arnold Communications chairman Ed Eskandarian first met 33-year-old Daniel Snyder in February and just six weeks later reached an agreement to sell New England's largest advertising agency.
Snyder Communications, a marketing services company in Bethesda, Md., last week bought Arnold in a pure stock deal valued at $120 million. Under terms of the sale, the Boston-based shop will continue to operate under its own name as a wholly owned division of Snyder Communications. No management changes are expected. Eskandarian will remain on board for the next three years, reporting to chairman and chief executive officer Snyder, who Eskandarian last week hailed as an "ambitious visionary."
"We believed it was a unique opportunity that was right for us and right for our clients," Eskandarian said.
Eskandarian and at least 15 other senior executives held shares of the agency and benefited directly from the sale, he said. While there are stock incentives to remain aboard, no other Arnold executive is bound by contract to remain for any length of time, he added.
Both Snyder and Eskandarian said there are no client conflicts, despite Snyder Communication's work for AT&T and Arnold's relationship with Bell Atlantic.
The sale includes Arnold service offices in at least a dozen U.S. cities, including Arnold Advertising in McLean, Va., The Arnold Agency in Richmond, Va., and direct marketing unit Wickersham Hunt Schwantner in Boston. Not part of the deal was Woolf Associates Group, the sports and entertainment representation agency bought by Eskandarian, Larry Moulter and hockey legend Bobby Orr more than two years ago.
The 61-year-old Eskandarian last week seemed both happy and relieved to have sold the agency that in nine years he has built from billings of $50 million to more than $752 million in 1997. The sale of Arnold is "not a curtain coming down on a final act, but one going up on a second act," he said.
That Arnold was sold came as little surprise. Eskandarian has stated publicly his desire to sell the agency and be out of the business by the time he was 65. He conducted exploratory talks last year with several suitors, including Cyrk of Gloucester, Mass., and The Wolf Group in Toronto.
The sale comes one month to the day that Hill, Holliday, Connors, Cosmopulos chairman Jack Connors announced the sale of his 30-year-old shop to Interpublic Group of Cos., a pure stock deal valued between $70-100 million.
Industry consultant Skip Pile, a former employee of Hill, Holliday who now runs marketing consultancy Pile and Co. in Boston, commented last week on the Arnold deal. "The roll-up is the rage of the '90s. It is what junk bonds were to [acquisitions in] the 1980s."
Snyder and Eskandarian seem bound by their ability to turn a deal. Eskandarian has built Arnold through about a dozen acquisitions; Snyder, since taking his company public just two years ago, has negotiated the buyouts of at least 14 companies.
Snyder Communications had been a virtual unknown in the ad world until January, when it bought Barry Blau & Partners, Wilton, Conn., in a stock deal valued at a stunning $72 million. The Arnold acquisition is expected to complement Snyder Communications' other companies, which include agency Brann Holdings in London, a trio of product sampling companies and several pharmaceutical marketing firms.
On the same day the Arnold deal was announced, Snyder Communications also purchased Publimed Promotions, a so-called medical detailing company in France. That buyout was described by analysts as securing Snyder's position as the leading contract sales organization in the world, employing some 4,000 drug sales staffers in the U.S., France, Hungary and the U.K., representing 16 of the 20 largest pharmaceutical companies in those countries. According to Snyder, his agency's revenues from direct-to-consumer selling of pharmaceuticals was well over $200 million last year.
Snyder last week pledged that he would continue to be "very aggressive" in pursuing more companies in Europe and the U.S.