$100 Mil. Deal Adds Another Option for Clients of DAS
NEW YORK--In a move that will add another direct marketing agency to its shopping cart, Omnicom last week reached an agreement to acquire M/A/R/C for $100 million.
The integrated marketing services company in Irving, Texas, is composed of M/A/R/C Research, which provides customer and brand marketing information and analysis, and Targetbase Marketing, a customer relationship management and direct marketing shop. Both will operate independently within Omnicom's Diversified Agency Services division. Last year, Targetbase reported gross revenues of $41.5 million and was
No. 9 on Adweek's list of top U.S. direct-response agencies.
"Basically what this does is give us another Rapp Collins capability, if you will," said Thomas L. Harrison, chairman and CEO of DAS, referring to Omnicom's direct marketing shop, Rapp Collins Worldwide. "Because all of our clients want one-to-one marketing, and this will give us yet one more independent group which will be competitive to Rapp, but will allow us to serve more of our clients."
Last year, Rapp reported revenues of $114 million and was ranked fourth on the Adweek list. Rapp and Targetbase often compete for accounts, most recently in Royal Caribbean Cruises' $10 million direct review, which has yet to be decided. Rapp also has an office in Irving, Texas.
Still, an outright merger is not in the cards. "Our plan is not to merge these companies," said Randy Weisenburger, Omnicom executive vice president and CFO. "If you look at Omnicom in each of our fields, we have multiple entries that can be competitors in their own right to each other, serving our client base."
Jack Wolf, president and COO of M/A/R/C, said his clients will benefit principally from having the global reach of Omnicom. "And then there are the additional opportunities for us to sell our service within the other brands in the group, like BBDO, DDB, etc.," said Wolf.
One concern is that the purchase may pose a conflict by bringing competitors of Procter & Gamble--which has public relations, interactive marketing and direct response business at DAS--into the Omnicom fold. "There's absolutely no client conflict in respect to this transaction at all," insisted John Wren, president and CEO at Omnicom.
"M/A/R/C is a really attractive property," said Jack Clark, an analyst at Paine Webber. "Targetbase is the real lynchpin of value here. I think it was a very fair price." --with J. Dee Hill