In a lengthy bit on AdAge, Darryl Ohrt explains why he sold Plaid, now called Humongo, to MDC Partners.
If there’s one thing we know about MDC, it’s that they’re fond of buying up shops on the brink of collapse. The most famous case is undoubtedly Crispin Porter + Bogusky, which according to those who know was nearly bankrupt prior to MDC swooping in. Obviously that was a smarter-than-smart move on the holding company’s part — and not just because it was a good deal.
Ohrt explains away the decision, noting that money played a part. In “Why I Said ‘Yes’ to an Acquisition” he writes, “The buzz around our brand had built to a perfect storm of new business, yet our staff could barely keep up with existing business. At the same time, the recession slowed our receivables, putting us in a tight cash situation.”
This is not an uncommon situation these days. The story with selling out always is one of hope for the agency’s employees which, at least for the time being, have an infusion of cash to keep them going. But at the rate MDC is spending that $300 million we just hope it’s enough to get Humongo back to where it needs to be. And there’s nothing wrong with taking an offer to keep your people working.
Read more about Ohrt’s decision process — which is much more in-depth than we explain, here.
More: “MDC’s Second Acquisition Announce in as Many Days: Plaid”