Arnold Finally Sells Newcomer Snyder Communications

Makes Pure Stock Deal Worth $120 Mil.
BOSTON–That Ed Eskandarian found a buyer for Arnold Communications surprised no one last week. What did come as a surprise was the buyer’s identity.
Snyder Communications had been a virtual unknown in the ad world until its January purchase of Barry Blau & Partners, Wilton, Conn., in a $72 million stock deal. Its chairman and chief executive is 33-year-old Daniel Snyder. Some observers compared Snyder’s methods to those of Martin Sorrell, the head of London-based agency holding company WPP, which began building its global network by first acquiring wire and plastic products companies.
Snyder Communications, a publicly traded marketing services company in Bethesda, Md., last year boosted its revenues 242 percent to $284 million primarily through acquisitions.
In the mid-1980s, Snyder reportedly convinced Morton Zuckerman, a current Snyder board member, to invest in a nascent network of free niche market magazines. When that venture failed, Snyder focused on database mining, compiling a vast list of foreign-born or first-generation Americans that became so profitable it allowed him to begin acquiring marketing specialty agencies.
The Arnold acquisition, a pure stock deal worth $120 million, adds to Snyder’s other assets, which include Brann Holdings in London, a trio of product sampling companies and several pharmaceutical marketing firms.
Boston-based Arnold will continue to operate under its own name as a wholly owned division of Snyder Communications. Eskandarian will remain on board for the next three years, reporting to Snyder. “We believed it was a unique opportunity that was right for us and our clients,” Eskandarian said. No other Arnold executive is contracted to remain for any length of time, Eskandarian added.
On the same day the Arnold deal was announced, Snyder Communications also bought Publimed Promotions, a so-called medical detailing company in France. The Publimed buyout was described by analysts last week as securing Snyder Communications’ position as the leading pharmaceutical contract sales organization in the world. Snyder revenues from direct-to-consumer selling of pharmaceuticals were well over $200 million last year, said Snyder.
Snyder and Eskandarian seem bound by their ability to turn a deal. Eskandarian has built Arnold through some dozen acquisitions; Snyder, since taking his company public just two years ago, has negotiated the buyouts of at least 14 companies. Snyder last week pledged to pursue more companies in Europe and the U.S.
Both Snyder and Eskandarian said there are no client conflicts, despite Snyder’s work for AT&T and Arnold’s relationship with Bell Atlantic.
The deal also includes Arnold service offices in at least a dozen U.S. cities and direct marketing unit Wickersham Hunt Schwantner in Boston. Not part of the deal was Woolf Associates Group, the sports and entertainment representation agency owned by Eskandarian, Larry Moulter and hockey legend Bobby Orr.
The buyout of Arnold was criticized, however, by one advertising consultant as intended to drive up the revenues of Snyder while offering Arnold employees and clients little in the way of improved or increased integrated marketing services.
The 61-year-old Eskandarian in nine years has built Arnold from billings of $50 million to more than $752 million in 1997. Eskandarian had previously courted several suitors, including Cyrk of Gloucester, Mass., and The Wolf Group in Toronto.