By Michael McCarthy
NEW YORK--Think New Ideas and Fathom Advertising are close to inking a deal that would merge their operations, sources said. The merger, which could be announced this week, is being brokered by Omnicom Group in New York, which wholly owns Fathom and has a stake in Think.
John Wren, president and chief executive officer of Omnicom, said: 'There's a strong possibility they could come together. Strategically, it makes sense. The principals brought the idea to us, and we are fully supportive of it, subject to final negotiations.'
Scott Mednick, chairman and chief executive officer of Think, with headquarters in New York and Los Angeles, and Larry Kopald, Fathom's managing partner and executive creative director, declined to comment.
The deal will put an end to Omnicom's dilemma over the future of Fathom, which was left with a single account after losing its flagship Acura car account. For Think, the arrangement provides a traditional advertising component as well as Fathom's estimated $20-30 million Oracle account, which is expected to grow significantly.
Sources said the deal will involve a stock swap. No cash is expected to change hands. Omnicom will trade in its 100 percent interest in Los Angeles-based Fathom in exchange for a larger stake in Think. Omnicom purchased a minority interest, now estimated at 16 percent, in Think last year, when it invested in five new media agencies. Think went public in November.
Kopald will become one of four partners and receive an equity stake, said sources. Think's other partners are Mednick in Los Angeles, president and chief operating officer Ron Bloom, and chief technology officer Adam Curry. Both Bloom and Curry are with On Ramp in New York.
Fathom, the former Los Angeles office of Ketchum Advertising, was reorganized and renamed last August in an unsuccessful attempt to retain the Acura luxury car account. The same month, Think was formed as a confederation of six marketing and new media agencies across the country.--with Angela Dawson
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