Euro RSCG Tatham CEO Gary Epstein’s search for a chief creative led to the purchase of an entire agency.
Tatham on Sept. 15 is expected to finalize an all-cash deal to buy McConnaughy Stein Schmidt Brown, a 12-year-old creatively driven shop that claims $70 million in billings and a client list led by Walgreen’s.
The agencies agreed to the acquisition and merger in part to fill what executives acknowl-edged to be shortcomings of each shop: Tatham’s creative product needs a polish, while MSSB has never been known for strong account service. An attempt to leverage the strengths of each brand while eliminating any negative baggage will be part of a new name that will begin with Euro RSCG. That name has not yet been decided.
The agency is being positioned as filling a void in Chicago—so long labeled a bastion of packaged goods mundanity—for a creatively focussed shop with heft.
“Immediately, Euro RSCG is going to be in the awards books,” said Jim Schmidt of MSSB, now chief creative officer of the new entity. “That’s going to be a huge perceptual shift.”
Tatham boss Epstein remains president and chief executive officer of the combined agency. His shop for years was regarded as a stolid, packaged goods operation; its client list and creative mindset dominated by its cornerstone Procter & Gamble account. P&G consolidated its business elsewhere early in 1999, which has led the agency to seek a fresh identity and move out of the list of agencies that become usual suspects in reviews for boxed foods and deodorants.
“We had to change our competitive set,” Epstein said. While describing the acquisition as a “merger of cultures,” Epstein clearly wants MSSB to infuse its creative mindset into the combined agency.
Tom McConnaughy, chairman and chief creative officer at MSSB, takes the new title of chief integration officer at Tatham, overseeing the agency’s Sales Machine and Interaction digital units. A third MSSB partner, Bill Stein, will work through the transition and then plans to retire, Epstein and Schmidt said.
Tatham has been in search of a chief creative since Bob Welke left the agency in March after a falling out with Epstein [Adweek, March 6]. That led executive creative director Jennifer Lemay to resign a month later, but a feared creative exodus of those recruited by Welke, a longtime Leo Burnett creative executive, never oc-curred. Helayne Spivak was brought in as interim creative head through June. MSSB, like many smaller creative shops often subject to sale rumors, has been in acquisition talks with at least one other agency in recent months, sources said.
After several weeks of negotiations and with approval from Euro RSCG’s Paris-based holding company, Havas, a sale agreement was reached last week.
Details of the deal were not disclosed, but Tatham could be expected to pay in the $5-10 million range, based on MSSB’s revenue.
MSSB brings about 35 employees to Tatham’s headquarters, a new space filled with the exposed concrete and wiring of an agency desirous of a creative aura. No layoffs are anticipated as the agency did not have a large back office operation and relied on Starcom’s Starlink for its media offerings.
While Walgreen’s leads the agency’s client list, MSSB also has a solid business-to-business and financial roster that includes A.T. Kearney, Hewitt Associates and Old Kent Bank. Epstein and Schmidt said there were no client conflicts.
Tatham Buys MSSB
