In its biggest consolidation move yet, Razorfish, New York, has acquired Spray, a Stockholm-based interactive agency with offices throughout Scandinavia.
The merger follows Razorfish’s purchase of tag media, Los Angeles, two weeks ago and marks the fifth time since spring that the company has acquired a competitor and absorbed it into Razorfish’s operations. The company is part of Omnicom Group’s Communicade unit of interactive agencies, many of which have been on an acquisition binge this year. Terms of the deal were not disclosed.
The move essentially makes official an existing relationship between Razorfish and Spray. Jeff Dachis, president and CEO of Razorfish, said officials at both companies have known each other for all of their three-year histories, and every six months two employees from each firm trade places as part of an exchange program.
Razorfish will now include a total of 350 employees split about evenly between America and Europe, where Spray’s offices in Sweden, Norway, Denmark, Finland and Germany will be called Spray Razorfish. Last summer, Spray acquired the Swedish firm Tetre, a technology-focused agency.
Spray earned more than $8 million last year, Dachis said, and Razorfish revenues for 1998 are expected to exceed $35 million.
“This is the first true global network of a service offering of our type,” he said, adding that the time seemed right to join forces. “We’ve grown significantly. They’ve grown significantly. It’s more of a global play now as opposed to two small shops in two cities.”
Dachis will remain president and CEO of the company. Razorfish chairman and co-founder Craig Kanarick will become co-vice chairman with Jonas Svensson, a co-founder of Spray. Per Bystedt, Spray CEO, will be chairman.
Bystedt cited the need for European clients to expand to the American market, and vice versa, as a rationale for going forward with the merger. “The world is getting more global,” he said, “and I think the customers over here are demanding almost that we are able to deliver worldwide.”
Spray had been approached about merging with other American companies but turned them down because their views clashed. “Razorfish and Spray have really a window of opportunity because our market coverage is not overlapping,” Bystedt said.
Spray has done technology and design-heavy work for clients including Ericsson, Nokia, Scandinavian Airline Systems, TV4, the largest television station in Sweden, and H&M, a Swedish store comparable to the GAP.
Razorfish has also acquired fellow New York shop Avalanche; Plastic, San Francisco; and CHBi, London, since the start of the year.