Midsized St. Louis Shop Says Sale of Minority Stake Opens Doors
CHICAGO--Realizing its status as a midsized promotions shop did not position it well for the future, The Zipatoni Co. in St. Louis sold a "substantial minority" interest to The Lowe Group, part of the Interpublic Group of Cos.
"It's a long, arduous road. We'd rather go [down it] with help," said Jim Holbrook, president and one of six partners with equity in Zipatoni.
The agency will retain its name and management setup, and will work with Lowe Group agencies including Lowe & Partners/SMS where there are no category conflicts, the companies said.
The shop, whose major clients include Miller Brewing and Coca-Cola, last year announced ambitious expansion plans that led to the January opening of an office in Chicago. The infusion of cash from Lowe will help fund further growth, including an office in San Francisco, Holbrook said.
Chief executive officer Jack Thorwagen founded Zipatoni in 1984 and remains a partner. With current claimed billings of $160 million, the shop has received a number of calls from potential buyers, but had only recently begun seriously entertaining the notion of selling, Holbrook said.
The company, which Thorwagen started with six employees, had been in the middle tier of shops in terms of size--a position that Holbrook said probably can't be sustained as agency consolidation continues. Zipatoni's biggest growth spurt came in October 1997, when Miller consolidated all its consumer promotions at the shop.
The deal, completed with cash and IPG stock, gives Zipatoni greater opportunities while not impinging on its independence, Holbrook said.
"We've got this place we can dance with, [and] we're not taking on a boss," Holbrook said.
Frank Lowe, chairman and chief executive officer of The Lowe Group, said in a statement, "In Zipatoni we have found a partner who has disproved the widely held prejudice that quality, creativity and imagination do not achieve the best results in the whole area of promotion."