MCBD and Elvis bought out by Canadian group Cossette
LONDON - Advertising agency Miles Calcraft Briginshaw Duffy, and its DM subsidiary Elvis, has sold a majority stake to Cossette Communication Group as a precursor to a takeover.
The first phase of the Canadian marketing group's acquisition is the purchase of a 51% stake in MCBD, worth about £7.8m. The agency's shareholders will also receive an additional "earn-out component", the value of which will be determined by the financial performance of MCBD and Elvis in the next two years.
The second phase of the deal is likely to take place in three years, when Cossette has the option to increase its ownership of MCBD to 75%. After five years, the group can buy out the remaining 25%.
"MCBD has developed an enviable reputation as a fast-growing, innovative, passionate and highly creative firm," Claude Lessard, chairman and chief executive of Cossette, said. "We are very pleased to welcome them to the Cossette network as a pivotal part of our operation in London, where we now offer a complete network array of convergent communication services. Most importantly, MCBD significantly enhances our international network."
MCBD founders Jeremy Miles, Helen Calcraft, Paul Briginshaw and Malcolm Duffy will remain with the company. Management at Elvis is also unaffected by the deal.
Miles said that MCBD had been approached by many suitors over the last few years, but none were suitable. "We didn't want to sell 100% equity of the business, do a three-year earn-out, boost profits, then leave," he said.
"It's a long-term partnership," he added.
The MCBD deal is Cossette's third London acquisition. In December 2003, it acquired brand consultancy Identica, which now has additional offices in New York and Shanghai. In September 2004, the group bought PR firm Band & Brown Group.
MCBD's had total billings of £26.7m in 2005. The group's clients include BBC Worldwide, Cadbury, Debenhams, Diageo and the Metropolitan Police.
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