Agency Completes Sale to IPG-Owned Lowe Group
BOSTON-Last week's sale of Mullen to the Interpublic Group of Cos.' Lowe Group ends founder Jim Mullen's quest to find the "right buyer" and spreads proceeds from the sale to a majority of his employees.
Mullen, 58, called Lowe Group chairman Frank Lowe the "most passionate executive about creative I've ever met" and said the two share a similar "world vision."
"I met someone whose organization I admire," Mullen said of Lowe, to whom he will directly report. "This allows me to fulfill a dream." Although he declined to discuss his contract, Mullen said he will remain at the helm of his agency for "at least another year or two."
Lowe's attraction to Mullen was threefold. Aside from being "a very, very good agency," London-based Frank Lowe, who traveles frequently, said he also gains an executive "with [Mullen's] experience and seniority in the U.S. all the time," naming Mullen vice chairman of The Lowe Group. A self-confessed technophobe, Lowe was also impressed with the agency's new media experience. "I can't even turn on my computer," he said.
Under terms of the deal, which were not disclosed, Mullen will retain its name and management team and continue to operate from its stately manor house in the woods of Wenham, Mass.
Sources said Lowe bought upward of 75 percent of the agency, which reported 1998 revenues of $38 million and billings of $254 mullion. According to industry estimates, Mullen sold for between $40-50 million in a combination of stock and cash. IPG stock closed at nearly $79 per share last Thursday.
Like Mullen, The Martin Agency in Richmond, Va., and Goldberg Moser O'Neill in San Francisco also report to New York-based parent company IPG through Lowe
At least one client wasn't fazed by the change in ownership. "It sounds like business as usual up there," said Ted Richardson, vice president of marketing for Swiss Army Brands in Shelton, Conn. "We've been thrilled with them in their tenure, and from what I hear, there will be no changes."
The profit sharing plan will change, however. Jim Mullen has long championed the belief that those who helped build the agency should share in the profits. As a result-and unlike the sales of Boston-based shops Arnold Communications and Hill, Holliday, Connors, Cosmopulos, where stock and options were distributed to a small group of mostly senior-level executives-more than 150 of Mullen's 200-plus employees received both cash and shares of IPG stock. The exact breakdowns could not be determined last week. Since Mullen was the majority shareholder, he is expected to reap the lion's share.
In the future, however, the agency will be "increasingly discerning" about who gets to share in the profits, according to a five-page memo issued to all Mullen employees last week, a copy of which was given to Adweek. Shares will be granted to employees of "unusually high performance, regardless of longevity," Mullen said.
Although none of Mullen's top-level management team-including president Joe Grimaldi, chief creative officer Paul Silverman and executive creative director Edward Boches-would reveal the duration or details of their contracts, Mullen claimed that they will all be around for a long time to come.
That will most likely reassure Mullen's employees, some of whom were taken by surprise by the sale even though Mullen had confirmed as recently as March his desire to sell out by year's end.
One employee, who requested that she not be identified by name, called the sale a "shock," but said the letter and a companywide meeting helped allay her fears. "It seems like a really good thing," she said. ƒ