Las Vegas’ R&R Partners Looks Ahead With Merger

R&R Partners gained national recognition with its “What happens here, stays here” campaign for Las Vegas. But CEO Billy Vassiliadis didn’t think the agency had enough firepower to compete for business beyond its Nevada base.

After three months of serious talks, R&R’s merger with two other Nevada players, effective Jan. 1, will improve the independent’s ability to “pursue clients on a scale that was outside of our reach,” Vassiliadis said.

R&R’s deal with crosstown shop Brown & Partners and Reno, Nev., public affairs consultant Peter Ernaut creates a company with 242 employees and billings it estimates at $225 million.

R&R, which claimed 2003 billings of $180 million, has almost doubled in size in the 10 years since the Chicago-born Vassiliadis took over. Last year, billings were up 16 percent, thanks to increased business from the Las Vegas Convention and Visitors Bureau, Caesars Entertainment and Mandalay Resort Group, and the addition of Cold Stone Creamery, among others. But “it was time to take it to the next level,” Vassiliadis said.

“We wanted to start knocking on some national doors,” he said.

Vassiliadis would not disclose financial terms of the deal, under which Brown & Partners president Mark Brown and Ernaut will each purchase equity in the company, he said. The agency has four other existing partners.

The 4-year-old Brown & Partners brand will remain, and the agency’s 30 employees will continue to work out of the shop’s Las Vegas space, executives said. Brown will become president of R&R, a role previously held by Vassiliadis and partner Mary Ann Mele. “A significant group of clients wants the comfort of a local shop,” Vassiliadis said, explaining the decision to keep the Brown & Partners name.

Brown & Partners managing partner Chuck Johnston will be promoted to president of the unit, which will act as a subsidiary of R&R.

Ernaut—a former partner at Las Vegas independent Forsythe, Francis, Ernaut—brings a staff of two and considerable political connections to the agency. He will become president of R&R’s public affairs division based out of Reno. A steadfast Republican, Ernaut also recently worked as managing government and public policy director at law firm Jones Vargus in Reno. In addition, he has served three terms as a Nevada state assemblyman and as chief of staff for former Gov. Kenny Guinn.

The plan is to “rapidly and aggressively expand outside Nevada” while also adding a “more formal presence in Washington” for political and public affairs work, Ernaut said.

R&R has few clients outside its Southwest base, and most of its billings are tourism, mass-transit and public-policy related. Catherine Bension, president of search consultancy Select Resources International in Santa Monica, Calif., said she is not sure the merger changes perceptions of the shop.

“They’re so entrenched in Las Vegas,” she said. “It may be difficult for clients outside of the market to assess what R&R might be able to offer.”

R&R client Mandalay Resort Group is set to do a merger of its own, with Brown & Partners client MGM-Mirage. Mandalay svp of marketing John Marz said the R&R deal gets his OK.

“This is really a good move for both of them,” he said. “Las Vegas consumers have changed a great deal, and R&R has stayed on top of that.”