IQ News: USI, Digital Evolution Merge

As the latest agency merger in a spate of consolidations, US Interactive, Malvern, Pa., and Digital Evolution, Los Angeles, will combine forces to form a new company under the USI name on June 15. Terms were not disclosed.
The new entity, whose clients will include Toyota, IBM, Microsoft and the American Stock Exchange, will be headed by Eric Pulier, executive chairman and co-founder of Digital Evolution, and Larry Smith, CEO of USI. Both will retain their titles; Pulier will be based in L.A. and Smith in New York.
The companies’ assets will be combined, and estimated joint revenues for 1998 exceed $20 million, according to the principals. Their combined 1997 revenues totaled $15 million. “It’s a merger of equals,” Smith said. “This is not one company acquiring another company.”
USI will now have offices in New York, Los Angeles, Malvern, Seattle and Washington, and plans to expand through more acquisitions. “We will be selectively looking and hoping to acquire some of the really smart independents in the marketplace that want to work with other really smart operators,” Smith said.
The agreement follows courtship of both agencies by others who were ultimately rejected. Digital Evolution chose to merge with USI, Pulier said, because it is complementary geographically and philosophically. “We are not a Wall Street invention,” he said. “We’re a group of truly creative enthusiasts.”
USI also plans to increase its work abroad this year. Digital Evolution already does work in Hong Kong and New Zealand. USI plans to open an office in Hong Kong and may enter Singapore.
–Adrienne Man