Agreeable to Merger

HMS Partners and Fahlgren circled each other for years before agreeing on a proposed merger last week, executives said.

“We’ve had a number of conversations,” said Steve Drongowski, chief executive officer of Fahlgren. It was not until last year, however, that talks between the two Columbus, Ohio-based companies got serious, Drongowski and his HMS counterpart, Rick Milenthal, said.

A letter of intent to merge Fahl-gren with HMS’s ad arm, HMS/Hallmark, has been signed, making a deal possible within 90 days.

The combined entity would claim revenue of approximately $40 million. The deal between the privately held agencies would be in stock.

While agency sources said Fahlgren’s loss of the Owens-Corning and Premier Cruise Line accounts spurred the talks, both CEOs downplayed the losses.

“This is something we’re doing for reasons bigger than one particular client,” Drongowski said.

The agencies do have a number of areas where they mesh. Each has expanded over the years to nine Midwest and Southeast markets that now, combined, include three Florida offices and Fahlgren Atlanta.

HMS Partners is the holding company of HMS/Hallmark, interactive shop Motivo and public relations arm HMS Success. Fahlgren is not strong in either public relations or interactive, Drongowski admitted.

“What they have added over the years are things we have not added,” he said.

“We feel the merger is a giant step in reaching a national platform,” Milenthal said.