Omnicom/DDB just bought adam and eve for £60m
Questions:
1. Given the rumours that abounded regarding the terms of WPP’s legal contretemps with A&E (apparently, after leaving RKCR/Y&R, one of them was caught soliciting clients before he was supposed to), does this mean Omnicom owns a slice of WPP? I find that very hard to believe, but it’d make things fun.
2. The new agency is called Adam and Eve/DDB, kind of like AMV BBDO (the smaller, more creative name comes first). It seems like an oddly supine position for a giant like DDB to take. I’m writing this before various details are revealed in tomorrow’s Campaign, but I’m intrigued to know what positions the management of A&E will take at DDB. Will Ben and Emer be the new CDs of DDB, the agency they left to join A&E? DDB London (as it used to be known) is currently without a CD, so it makes sense.
3. Does the receptionist have to say ‘Hello, A and E DDB,’? It’s like a sweet little poem.
4. How long’s the earn-out?
5. Will this get in the way of Emer writing another children’s book? I hope not.
UPDATE: some of the questions are answered here. All looks good (Ben and Emer=ECDs).
If I was management at A&E right now I wouldn’t take any position at the stupid new agency. I would take a position on a hot naked woamn on a hot fucking beach and never do another stroke of work for the rest of my goddamed life.
Imagine never having to say or hear the word “Stradegy” ever again (you have to say strategy with a d instead of a t these days) or have to appear to care about the irrelevant nonsense that clients think is so vital (colour of the extras’ trousers)and never have to try to understand the difference between a platform, a territory and an idea or experience the fear that you will be found out, ever again.
Nice.
I think the surprising thing is how quickly A&E have been snapped up. Good luck to them. They’ve probably worked very hard over the last 3 years (or is it 4? I can’t be arsed to look it up) and some of them are undoubtedly talented. In 5 years, they’ll be really rather rich. And if you’re going to be glued to an industry leviathan, at least they got DDB not McCann or JWT.
…I wish someone would buy me.
Probably a better investment than the Facebook.
These deals are always so confusing aren’t they? Although they make good headlines.
A & E have income of £8m right?
http://www.campaignlive.co.uk/analysis/1122221/
Must be a hell of a growth trajectory to get their pay out. So in effect they are going to have to have to earn the money to pay themselves their earn out in the next 5 years.
What’s an earn out? Does it mean they don’t get their hands on the filthy lucre for 5 years? Why?
@NW – Deals normally has two parts. I say normally, fuck know these days. Why don’t people just run an agency and keep the profits? I know why, but…
Normally £x up front, here’s some money to buy the wife and kids something nice and pay off the mortgage you deserve it – and part two now go and hit these targets. As you hit these targets you get some more cash and then a final payment. Miss the targets and something bad happens.
Sometimes it’s all money up front, especially in tech or innovative products but rarely in advertising today.
The length of the deal reflects the multiple. Multiple = profit or revenue multiplied by a figure which gets to the final buy out figure. In A and E’s case it looks, well, massive!
Deals fuck up all the time.
Hi Ben
I am bloody delighted.
That’s it.
re point 3, we’ll need to wait and see but when you call AMV BBDO the receptionists do indeed say “Hello Abbott Mead Vickers BBDO” all day long, which is a test of anyone’s forebearance surely
It’s like this: There’s an initial consideration paid in cash and/or omnicom shares. Enough to pay off the mortgage and focus on the job, say 15-20m in used notes and sellable shares. If they hit very tough targets, and on condition that they lick DDB into shape – a top 3 agency that shits black pencils and no selling those Omnicom shares or walking out the door to start another agency, then the three founders, who own 72% then Ben and Emer who have a few percent teach, plus some others who own a slice, as well as the staff share fund will get their full 50-60 million up to five years from now. Then they can fuck off at fifty and do non-exec jobs.
Rather than get the whole payment up front, with an earn out you get a smaller initial payment and then you are required to meet a series of targets to make up the remainder over the 5 year period.
@Adam: I bet you are.
Emer’s children’s book sounds interesting. What’s it called?
It is really good. My five-year-old loved it. I can’t remember its name, though. It involves a pig who builds a rocket and flies into space. Hens are evil etc.
So they are actually merging the two agencies?
Bernbach will be turning in his grave. His great legacy merged with a company who have grown successful making the kind of sentimental bobbins that his sharp, witty, cutting creatives drove out once in the 60s.
It’s deja vu all over again.
They’re hoping that by buying in talent they’ll turn their place around. It won’t work because no one knows anything.
@SOG
‘it’s deja vu all over again?’
thank you for that.
60 million for nicking stuff off youtube, not to shabby at all.
Awesome achievement, and a massive congratulations to all involved.
Most start-ups are made up of talented industry mavericks, but what makes an Adam & Eve a success and somewhere like HMDG (Who the fuck are they I hear you ask – http://www.campaignlive.co.uk/news/594183/) sink into oblivion.
Anyone care to share the secret?
Maybe that would explain the latest VW spot. Father/daughter relationship accompanied by plinky-plonky music.
Maybe they were trying to appease the new guard with a submissive homage to their signature.
Maybe A&E got their grubby hands on the brief before the take over was announced.
I think it’s a great buy and could re awaken the sleeping giant that is DDB which despite recent run is a cracking creative agency. I hope it gets revitalised not totally overridden.
Yes, what an awesome achievement! For fucks sake is this all advertising has become these days, the business of selling businesses?
Building up a company and selling it for a wedge is good business, but it sure ain’t fucking advertising. But Campaign is the cheerleader for that being the measure of our godforsaken industry, and it seems like more and more people can’t see beyond the filthy lucre.
Whatever happened to setting up an agency as a platform to do the work you want to do? What is it now to be considered a ‘successful’ agency? To read Campaign some commenters on here you’d think success in advertising is billings, profit and loss columns and buy-outs rather than quality of work.