MDC Partners announced today it has taken a 51 percent majority stake in Portland, Ore., independent digital agency Instrument for an undisclosed sum. It’s the holding company’s first 2018 acquisition of what will likely be several.
Founded in 2002, Instrument is one of the largest digital indie shops in the U.S., housing 175 strategists, producers, designers, engineers and content creators, according to MDC. The holding company said Instrument adds to its portfolio of “modern, innovative and digital-first agencies” as clients increasingly look to navigate the changing digital landscape.
“Instrument is one of the largest and most respected independent creative companies,” Scott Kauffman, chairman and CEO of MDC Partners, told Adweek. “They fit perfectly into the MDC family.”
Coming off a strong 2017, MDC previously said it would be looking to add to its portfolio this year through a series of acquisitions. Its partnership approach means it always takes a majority position in an agency, leaving control in the hands of founders. Its other agency partners include 72andSunny, Anomaly, Allison + Partners, Colle McVoy and Crispin Porter + Bogusky.
Instrument CEO Justin Lewis founded the agency alongside chief creative officer JD Hooge and chief operating officer Vince LaVecchia.
Lewis told Adweek a couple of years ago that he and his fellow founders launched a search to find a buyer for Instrument, one that would “build on our legacy” and keep it alive for years to come. Being able to keep a 49 percent interest in Instrument and control of its daily operations was exactly what they wanted.
“We have talked to dozens of companies over the last few years, and no one matched the spirit of MDC,” Lewis said.
Lewis said Instrument received offers from other advertising holding companies, tech giants and private equity firms before entering into discussions with MDC but declined to identify the other prospective buyers.
Leadership changes are not expected as a result of the deal. Lewis said Instrument was skeptical going into negotiations, so it wouldn’t have entered into the partnership if business wasn’t going to continue as usual. He said the 49 percent ownership stake shows “there’s mutual respect” between his agency and its new parent.
“In MDC, we also found a partner that respects our culture and our entrepreneurial spirit of independence,” LaVecchia said in a statement. “This type of partnership is truly rare to find in this industry.”
Instrument works with brands that include Google, Nike and Airbnb. One of its campaigns involved co-creating the Nike + Run Club app, which lets users track their runs in real time and lets the brand engage with consumers.
For MDC, Kauffman said the company will continue to seek to acquire agency partners in 2018 that “believe in themselves and don’t just want to cash out and make an exit.”