In a move intended to bolster its packaged goods business, Gage Marketing Group in Minneapolis has signed a letter of intent to acquire crosstown promotions agency Mayer-Douglas.
"They're steeped in packaged goods background," said Tom Belle, Gage executive vice president.
"We want to add that type of talent and bring those strong skills to our agency."
Gage is evaluating other deals to expand its expertise and broaden its reach. The agency is talking to Internet specialist agencies in the Midwest, Belle said, and has contacted undisclosed marketing agencies on the East Coast about ways for it to establish a presence there.
Mayer-Douglas, which Belle called a "small but highly regarded" agency, boasts clients including ConAgra's Healthy Choice and Banquet brands and Hunt-Wesson's Orville Redenbacher and Swiss Miss products.
Terms of the deal were not disclosed. The transaction is expected to close before the New Year.
Gage will absorb Mayer-Douglas and handle the Hunt-Wesson business out of its Newport Beach, Calif., office. Other clients will continue to be handled in Minnesota.
Gage clients include such major companies as Nestle, American Express, Kaiser Permanente and Nissan. Belle estimated the agency's billings at $400 million.
"This alignment with Gage gives us the breadth and resources we need to continue to deliver on our strategic promise to our clients," said Randy Mayer, president of Mayer-Douglas. Gage's "huge technical capacity" could help his packaged goods clients expand more efficiently into direct marketing, Mayer said.
The proposed acquisition is Gage's first since it divested its Gage Marketing Support Services promotion-execution wing to AHL Services earlier this year. "The strategy was one of raising some capital and growing our agency" through acquisitions like Mayer-Douglas, Belle said.