Mullen, LHC Merge

In a move that could foreshadow further consolidation among Interpublic Group holdings, Long Haymes Carr and Mullen merged operations last week, with the latter’s Joe Grimaldi serving as CEO of the combined agency.

The Martin Agency, Richmond, Va., tops the list of shops that could similarly be “reinforced,” either through a merger with an existing IPG holding or via an acquisition designed to expand Martin’s geographic scope or depth of service offerings, according to sources.

Michael Sennott, deputy chairman of The Lowe Group, Martin’s immediate parent within IPG, acknowledged that Lowe is looking to grow the Martin operation. However, he downplayed suggestions that Martin will be combined with another IPG shop, such as Suissa Miller, Santa Monica, Calif., which sources pegged as a likely partner for Martin.

Martin last year claimed revenue of $62 million on billings of $410 million; Suissa Miller had revenue of $31 million on billings of $282 million.

Mullen, with a strong creative reputation and below-the-line resources such as public relations, was seen as a complementary fit to LHC, which is known for its retail advertising, said Sennott.

“We’ll be able to develop, deliver and create added value for existing clients,” said Mullen’s Grimaldi, who believes Mullen will benefit from LHC’s media buying capabilities. “In addition, we see more opportunity to be a more significant entity and pitch significant pieces of business,” he said.

Mullen’s offices in Wenham, Mass., and Detroit will retain their name while Long Haymes Carr, Winston-Salem, N.C., will be renamed Mullen/LHC. The combined agency will have billings of $620 million and more than 500 employees.

Steve Zades, chairman and CEO of LHC, will take an executive position at Lowe Group, New York, after facilitating the agency transition. LHC chief creative officer Mylene Pollock, who joined the agency in 1999 from Ogilvy & Mather in New York, has been let go. Mullen chief creative officer Edward Boches will head up combined creative operations. Direc-tor of account services Peter Mitchell, who joined LHC just two months ago from Saatchi & Saatchi, New York, has also been dismissed. Grimaldi will take on the lion’s share of Mitchell’s duties.

While both agencies experienced mixed performances over the past year, Grimaldi insisted that client losses did not drive the merger decision. LHC added Midway Airlines and T.J. Maxx, but lost the $37 million creative account for Winston cigarettes as well as BellSouth Mobility. Mullen grew its billings roughly 25 percent, to $420 million, according to Grimaldi, but lost and L.L. Bean. Mullen rallied at year’s end, adding Agere Systems and Rational Software.

The combined agency will offer services that include general advertising, brand planning, direct marketing, interactive, public relations, database management and media planning and buying. Major clients include General Motors, Nextel Communications, Wachovia, Hanes and Genuity. There are no client conflicts as a result of the merger, Grimaldi said.

Mullen has been part of Lowe Group since April 1999; LHC joined Lowe six months later.

The consolidation strategy is not limited to Lowe Group, but reflects an overall IPG philosophy, according to sources close to the holding company. Last year, Goldberg Moser O’Neill, San Francisco was brought under the control of Hill, Holliday, Connors, Cosmopulos, an IPG shop in Boston, to shore up deficiencies at both agencies.John Coletti