Ayer deal near By Noreen O'Leary and Cathy Taylo

Ayer Inc. is close to a deal to sell a majority stake to an investors group led by ex-Saatchi & Saatchi worldwide head Richard Humphreys, well-placed sources said l

The surprise, whirlwind transaction with Humphreys was negotiated in the last two months. Last summer, Ayer began merger talks with Ketchum Advertising, but those discussions were apparently derailed by Humphreys’ efforts. Ayer clients have reportedly already given the transaction their blessing and Humphreys is expected to take a seat on Ayer’s board. Agency chairman/ chief executive Jerry Siano is slated to retain his day-to-day operating titles and other key Ayer personnel also remain in place, according to the sources. Siano could not be reached for comment Friday.
Humphreys declined to comment on speculation about Ayer. He is establishing a private U.S. holding company, from which he’ll oversee his new investment and look for further acquisitions for Ayer. It could not be determined at press time the identities of other members of Humphreys’ small group of investors, or the dollar value of the deal.
But while it appears as if there are few major changes in store at Ayer–initially at least–it is expected that Humphreys will play a strong hand in sorting out Ayer’s tangled business dealings. In the past several years, Ayer has sold its Canadian agency, McKim Advertising, and approximately 75% of Ayer Europe to pay off its debt, but future debt obligations remain.
Some agency insiders said that as part of the deal with Ayer, Hum- phreys negotiated settlements that should alleviate some of the shop’s problems: real estate at Ayer’s Worldwide Plaza headquarters and deferred compensation to former Ayer executives including one-time chairman Louis Hagopian.
Humphreys will make a big push to expand Ayer’s international network, with the U.K. a top priority. Ayer is currently in talks with London agency Leagas Shafron Davis Chick, but London observers expect Humphreys to consider larger acquisition targets.
Since leaving Saatchi in January, 1992, Humphreys bought a 4.7% stake in London’s Birkdale Group plc, a small publicly-held marketing services company. While he publicly said he was looking at smaller European acquisitions, last week he temporarily stepped down from his role as a Birkdale director, saying he was part of a consortium that was buying into an American advertising agency.
Copyright Adweek L.P. (1993)