Margeotes Sells To MDC

Little-Known Toronto Buyer Eyes More U.S. Shops
NEW YORK–The wave of consolidation among midsize agencies continued last week with the agreement by Margeotes/Fertitta + Partners’ management to sell a majority stake to MDC Communications. It is the first U.S. agency acquisition for Margeotes’ new parent, which was founded in 1980 as a small photographic supplier.
The deal ends years of speculation regarding Margeotes’ future. The agency–one of only a handful of mid-sized independents left in New York–has met with many suitors but never seriously entertained their offers, said shop president George Fertitta. MDC first approached Margeotes in June.
MDC is planning seven more acquisitions, including an unidentified New York shop and another in the Midwest, by year-end. In May, the company said it planned to buy Cybersight, an Internet design and marketing company based in Portland, Ore. MDC intends to take its acquisitions public in the fall, said MDC president Michel Frappier. (MDC is already publicly traded.)
MDC’s holdings include specialty agencies in healthcare and agribusiness, sales promotion and public relations. Its 14 Canadian units also include Bryan Mills & Associates, a producer of annual reports, and corporate identity design shop Savage Sloan in Toronto.
The opportunity to expand Margeotes’ resources while maintaining a large measure of independence proved irresistible to Fertitta. “At some point, you have to say that there is a new world out there,” he said. “This will allow us to participate in larger pitches. This isn’t happening so that I can finally buy a boat.”
That “new world” has seen several midsize agencies, including Partners & Shevack, EvansGroup and Hill, Holliday, Connors, Cosmopulos, sign up with larger networks this year, in part as a response to the growing number of account consolidations by major clients.
The agency’s 11 principals–Fertitta, chief operating officer Fred Langbecker, creative director Graham Turner and eight others–have sold partial stakes to MDC and will maintain a minority interest in Margeotes. Details were not disclosed. The agency will keep its name.
Margeotes’ billings stand at $250 million from MediaOne, McGraw Hill, Stolichnaya, NFL Sunday Ticket and others.