Ceo Robert Pinne, along with six of the shop's 17 employees and its remaining accounts, will join the staff of MacDaniels, Henry & Sproul here. Pinne and his group will not have an equity stake in the agency.
The move will boost the $10-million MHS by $6 million from former Pinne accounts including Southern Pacific Railway, Hewlett-Packard Components Group, Wollongong Software, analytic equipment-maker Finnigan MAT and the California Tree Fruit Agreement, and give it the business-to-business expertise it had sought in a merger with Hovatter LaPointe. Those talks broke off two months ago. MHS will continue to share the Verifone account with Hovatter LaPointe, which the two agencies pitched jointly.
'We've met with all the clients and 100% of them are on board,' said Bob Sproul, coo of MHS.
At its peak in the early 1980s, Pinne Herbers boasted 55 employees and $28 million in billings. Pinne said that the unraveling of his agency is rooted to a series of financial mishaps that drained the firm of capital during the 1980s, including the bankruptcy of one client that left the shop holding a $470,000 media bill. The recent loss of Schlage Lock, Peterbilt and Mechanics Bank, coupled with an overpriced lease for a space that had grown far bigger than the agency's needs, became too much to handle. 'As long as we had cash flow we were able to survive,' said Pinne, 'but it's become an impossible situation.'
Copyright Adweek L.P. (1993)