CIA VSM Media has plans to acquire a handful of independent media agencies over the next six months, with an eye to building a $1 billion enterprise by the end of the year.
The company, a unit of Tempus Group in London, has drawn up a list of potential targets, said sources. CIA VSM chief executive Tom Sassos is expected to close two deals this summer. Targets include CPM Media Management, Chicago; Empower (formerly Media That Works), Cincinnati; and New York shops Media First International, TBS Media Management, Horizon Media Inc. and R.J. Palmer Inc.
"We do have a growth strategy to acquire companies within the next six months," said Sassos, who declined to confirm the list of shops or discuss any talks now under way. "We've had conversations with virtually all of them, but nothing is imminent," he said.
Sassos, who sold VSM to CIA Medianetwork last September, acknowledged his shop (with roughly $300 million in billings) must grow "significantly to gain critical mass" and better serve CIA's global clients, such as Novartis, Unilever and Shell. As for his stated $1 billion in billings goal: "We'll get there by a variety of ways, through CIA, through growth of our own clients and aggressive acquisitions."
Executives at TBS and Empower said they had not been contacted by VSM, while representatives at the remaining shops either declined comment or could not be reached by press time.
However, sources said Sassos' proposals were attractive to independent shops as he is offering their entrepreneurial founders new management roles and a share in future profits.
"The beauty of CIA and why shops are listening is they're not an agency group; they're a media group only," said a source, adding that Sassos was being strategic in choosing his targets. "He's not just running around with a checkbook."
CIA Medianetwork, with some $2 billion in worldwide billings, remains a relative newcomer in the U.S. marketplace where larger titans reign. Recently formed Western Initiative Media Worldwide claims $10 billion in billings; Young & Rubicam's The Media Edge follows with $3 bilion, while Carat claims $1.2 billion.
For CIA to surpass its rivals, it must also beat them at finding lucrative prey. "With so many others looking to make acquisitions, it's a tall order," another source said.
-with Andrew McMains