In the annals of corporate acquisitions of UK advertising agencies, Lake Capital's putative purchase of Engine must surely go down as one of the most muddled.
Now that the deadline has passed for a rebel alliance of external shareholders to accept differential terms of the deal (which valued Engine at about £100 million), the photograph on the front page of this magazine showing a grinning Engine Group management team looks not just a little silly but also chronically premature. With the ex-employee shareholders standing firm, the decision by Engine to skip to the stage where congratulations were being dished out all round when things were far from concluded smacks of complacency.
Of course, questions of whether ex-employees deserve the same deal as those who currently work there are academic and for others to debate – although all have been instrumental in building the company. So it’s understandable to see them standing firm (for now) – they seem to have a strong hand to play.
The photo showing a grinning Engine Group management team looks not just a little silly but also chronically premature
It’s likely (essential, maybe) that the deal will eventually go through as, beyond saving greater reddening of faces, it’s very much in Engine’s interest that it does. However, it now seems likely that Engine shareholders led by Peter Scott, rather than Lake Capital, will be left to sort out the mess – indeed, it’s tempting to speculate that those at Lake Capital must be wondering what on earth they have bought into given the procrastination. Either way, it seems as though it will be squeaky-bum time over at Great Portland Street as Engine staff are faced with the prospect of diluting their offers of shares and cash in order to rush the deal through in case Lake Capital loses interest and they maybe lose everything.
And so to another deal that we hope will be rather more successful. MDC Partners’ acquisition of Albion and its subsequent alignment into Kirshenbaum Bond Senecal & Partners is a just reward for the industrious and likeable Jason Goodman. Though rarely troubling the creative awards juries, his agency has undoubtedly been modern, inventive and entrepreneurial.
Goodman probably doesn’t care about the absence of a heaving awards cabinet at Albion’s Shoreditch headquarters – instead, he has (successfully) sold a company that was built on investing in and growing businesses through marketing at the early stages of their development. KBS, meanwhile, has established a footprint in the UK with a culturally like-minded partner with plans for further expansion. For this, Goodman and his 14 colleagues have split the spoils of a £20-£30 million cash deal. Which is not a bad return when you consider the anguish Engine now appears to be going through.
Claire Beale is away
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