China’s BlueFocus Is About to Acquire This North American Advertising Player

Eyes Vision7 International, parent company of Cossette

A Chinese company has set its sights on a North American advertising player, with Beijing’s BlueFocus close to finalizing the purchase of assets from Vision7 International, parent of one of Canada’s most well-known agency networks, Cossette, according to sources.

Sources estimated the purchase price at $220 million.

Brett Marchand, CEO of Vision7 and Cossette, declined to comment specifically about the talks but acknowledged in a statement that since the summer Vision7 investor Mill Road Capital has been reviewing "strategic alternatives for its majority holdings in Vision7 International's North American assets. That process is continuing and we are unable to comment further at this stage." 

It has been an open secret since 2009, when Cossette went private with the backing of Mill Road, that the agency was up for sale. Mill Road paid $131.5 million, or $7.87 a share in cash, for stock that had been trading on the Toronto Stock Exchange at around $5.85. (At the time the company’s senior management, led by president, CEO Claude Lessard, owned 30 percent of its shares.) The Mill Road deal followed a hostile bid by Cosmos Capital, which included former top Cossette execs, who offered $4.95 a share.

A year after Mill Road’s investment Cossette restructured, creating a new holding company, Vision7, now with 1,200 employees in Canada, the U.S. and the U.K. The holding company owns Cossette’s agency holdings and a marketing services division known as Esprit de Corps.

Started in 1972 in Quebec City, Cossette has grown its agency operations to work for multinationals like McDonald’s, General Motors, General Mills and Home Depot as well as Canada’s national telecommunications company, Telus, the Royal Canadian Mint and Via Rail Canada.

Beyond Quebec City, Cossette has offices in Montreal, Toronto, Vancouver, Halifax and Chicago. The agency has attempted to unsuccessfully develop a U.S. footprint a number of times, including opening and closing in New York.

BlueFocus, the fast-growing 18-year-old Beijing communications company, has expanded from its PR roots into other marketing services and works for multinationals like VW, Pepsi, Microsoft, Audi and BMW and Chinese marketers like Lenovo and Baidu. After taking a majority stake in London-based agency We Are Social last December, BlueFocus co-founder and chief Oscar Zhao—equipped with a hefty war chest after the company’s 2010 flotation on the Shenzhen Stock Exchange—has looked to acquire other agencies in North America and Europe.

“BlueFocus has invested a lot to review a wide range of North American assets,” said Greg Paull, principal at consultants R3, which has been consulting with BlueFocus on multiple North American deals. “I have no doubt this will be the first of a number of moves from them in the next 12 to 24 months.”