NEW YORK -- Now that Sir Martin Sorrell has "anchored" WPP's Red Cell network in New York with his acquisition of Berlin Cameron & Partners, sources said the holding company is looking to "fortify" the London operation with creative boutique Mother.
Sources said Sorrell exhibited tremendous largesse in his buyout of Berlin Cameron, agreeing to an earnout arrangement that could bring the total cost to more than $40 million-a sum far exceeding the traditional 1 1/2-times-revenue multiple.
Berlin Cameron has revenue of about $20 million, sources said, making a $30 million price tag generous by market conventions. And while the 4-year-old shop is known to be highly lucrative -- with a profit of around $8 million -- the price tag came to about five times that figure, sources said.
Berlin Cameron chairman Andy Berlin, who takes over as chief creative officer and co-CEO of Red Cell with Lee Daley, declined comment on details of the acquisition, as did WPP executives.
Berlin, 51, and Daley, 38, replace Red Cell's current CEO, Luca Lindner, who is said to be leaving.
Ewen Cameron, who was head of planning at Berlin Cameron, is responsible for agency operations in the U.S. It was revealed last week that Cameron, a planner by training, is in fact a larger shareholder than Berlin. Berlin denied that he does not own the biggest stake.
The combined agency, now known as Berlin Cameron/Red Cell, claims billings of $265 million from clients such as Reebok, Coca-Cola, New York Life and Ralston Purina.
The shop has also handled projects for General Motors, including corporate ad assignments and the Olympics, a client representative said. The agency will no longer work with the car manufacturer, because its new WPP sister agencies handle Ford. Executives at Mother's office in London could not immediately be reached for comment.