Mullen, Interpublic See “Cultural Fit’

Frank Lowe Gains U.S. Lieutenant, New Media Expert in Buyout
BOSTON-Look no further than the bottom line. Contrary to some theories, the Interpublic Group of Cos.’ acquisition of Mullen is not part of a broad strategy to build a network of regional, creatively focused agencies.
Rather, it was more happenstance and a good “cultural fit” that led the IPG-owned Lowe Group to buy a majority stake last week in the $254 million shop in Wenham, Mass., said IPG chairman Phil Geier.
Prudential analyst James Dougherty said IPG is an “acquisitive company … I don’t know if you can read a whole lot more into it than that.” He added: “Acquired growth is a very important part of [IPG’s] strategy. They have to be buying to build.”
Even though the transaction is based on a combination of IPG stock and cash, Geier described it as a deal driven by Frank Lowe, chairman of the Lowe Group. “This is brand design by Frank,” said Geier.
Lowe’s attraction to Mullen was threefold. London-based Frank Lowe said first and foremost that Mullen “is a very, very good agency.” Lowe, who travels frequently, said he also gains an executive “with [Mullen’s] experience and seniority in the U.S. all the time.” Mullen was named vice chairman of The Lowe Group.
A self-confessed technophobe, Lowe is also impressed with Mullen’s new media capabilities. “I can’t even turn on my computer,” he said.
Like other agency executives at or near his age, Jim Mullen, 58, chairman of New England’s largest independent shop, had been seeking a buyer to secure a profitable exit from the agency he founded in 1970. He also realized he would need international resources in order to take the mid-size, one-office operation to the next level. Mullen said he was attracted to Lowe because of its hands-off management approach.
In return, Lowe nets a third creatively focused agency-it also owns Goldberg Moser O’Neill in San Francisco and the Martin Agency in Richmond, Va.-in an area of the country where it has no presence.
As for IPG’s growing presence in Boston where it now owns two dominant agencies, Dougherty noted: “Boston has never been hospitable to outsiders. Other agencies have tried to establish branches there and failed. It’s a sizable market and to be there you have to buy a local company.”
IPG last year paid what was considered a premium price for Hill, Holliday, Connors, Cosmopulos. Even though they are now part of the same family, Mullen and Hill, Holliday are expected to continue as rivals. Whether the two shops will someday be folded together is an open question, analysts said. If something were to go awry, it would be more likely for Mullen to be absorbed by Lowe or for Hill, Holliday to be folded into Ammirati Puris Lintas, rather than a merging of the two regionals due to geography alone.
“That would only happen if one of them got into trouble,” Dougherty noted. “IPG is very much into letting agencies stand alone unless they start losing accounts or there is a financial problem-then you might see a merger.”
IPG’s acquisition of Mullen seemed to only slightly affect IPG’s stock price. On Wednesday, a day after the deal was announced, IPG stock fell more than 2 points to 78, but still near its 52-week high of 80 5/8. At press time Friday afternoon it was around 78 3/8. ƒ