Hill, Holliday Agrees to Buy SFI

Hill, Holliday, Connors, Cosmopulos continued to rebuild its online marketing capabilities through an agreement last week to acquire SF Interactive.

Terms were not disclosed; the deal is expected to close in early April.

SF Interactive has about 100 employees in its San Francisco and Washington offices and estimated revenue of $12 million. Sources said that given the current market, an interactive agency of that size would likely sell for between $10-15 million. SF Interactive clients include Jiffy Lube, Sallie Mae, VeriSign and Adaptec.

With interactive shops currently undervalued, Hill, Holliday likely paid substantially less than it would have paid a year ago, said industry analyst Bill Montbleau of Montbleau Associates in Burlington, Mass., who predicts more such acquisitions in the near future.

“You’ll see a lot more from us” in terms of Hill, Holliday making interactive marketing purchases and growing that function organically, said executive vice president Laurel Rossi, who oversees the agency’s interactive, direct marketing and database activities.

“While most agencies are rethinking their strategies given the uncertainty of the marketplace, Hill, Holliday is moving aggressively,” said Jack Connors, CEO of Boston-based Hill, Holliday, a unit of the Interpublic Group of Cos.

SF Interactive will be combined with Hill, Holliday’s existing San Francisco operation, GMO/Hill, Holliday, once the deal closes. The SF Interactive name will cease to be used.

“As part of GMO/Hill, Holliday, we’ll be able to provide our clients the full range of customer-centered communications,” said Bruce Carlisle, CEO of SF Interactive, who be-comes executive vice president/managing partner of GMO/Hill, Holliday. Glen Whiting, general manager of SF Interactive’s Washington office, will retain oversight of that office.

Hill, Holliday’s interactive operations were essentially depleted in late 1999 when parent IPG formed Zentropy Partners. Zentropy floundered, cutting staff as 2000 drew to a close. The company was brought into alignment with McCann-Erickson WorldGroup’s MRM Worldwide network, also a unit of IPG.

Separately, Hill, Holliday has begun to rebuild an interactive capability in both its Boston headquarters and New York office. Bill Lynn was recently named executive vice president and managing director of the interactive unit in Boston. LISA BERG