MINNEAPOLIS—Padilla Speer Beardsley, one of the largest independent public relations firms in the Midwest, has signed a letter of intent to acquire CRT/tanaka, a Richmond-based firm with offices in New York and several other major cities.
The merger will create a firm, Padilla CRT, that ranks among the top 10 independents in the US. The two agencies had combined fee income in excess of $29 million in 2012, according to numbers submitted to The Holmes Report 250 global rankings, and will have 200 employee-owners spread across offices in Minneapolis, New York, Los Angeles, Virginia and Washington, DC.
Padilla CEO Lynn Casey will serve as chair and CEO of PadillaCRT, while CRT/tanaka CEO Mark Raper will be president. All other key CRT people will be staying on, according to Casey, including Patrice Tanaka, CRT’s chief creative officer. And CRT’s employees will become part of Padilla’s employee ownership plan.
According to Casey, the process leading to the acquisition began five years ago, when she recognized the need to build up her firm’s presence in New York, and particularly to add the kind of digital, social and content creation capabilities clients were looking for as part of a more integrated approach to communications.
Having held talks with several firms and struggling to find the right cultural fit she was approached by Raper—whose firm had worked with Padilla as part of the Lumin Collaborative, a multi-agency think tank—who wanted advice on setting up his own employee ownership plan. The logic of a merger soon became apparent.
“I wanted a firm that would be a good fit in terms of values and ethics,” says Casey. “It had to be more than just a bolt-on. We had worked with Mark and knew CRT/tanaka would be a good fit.”
CRT/tanaka brings a 25 person New York office, created through the acquisitions of Patrice Tanaka & Co. and food and beverage specialist Lewis & Neale; a brand strategy group led by Kelly O'Keefe of Virginia Commonwealth University’s Brandcenter; and an account planning function, all of which Casey says will supplement Padilla’s existing capabilities.
PSB, meanwhile, had a larger digital team, a research and insights division, and strength in crisis and litigation communications.
Clients of the merged firm include BASF, Merck, UnitedHealth Group, Girl Scouts of the USA, 3M, Barnes & Noble College, US Highbush Blueberry Council, CarMax, Wines from Rioja (Spain), Land O’Lakes, Cargill, Rockwell Automation, Ditch Witch, RTI Surgical, Hass Avocado Board and SAP.
Casey says she doesn’t rule out additional acquisitions. “We don’t have the goal of geographic expansion or domination for the sake of it but we do have the resources to make some additional acquisitions if we identify the right firm in the right market.”