Arun Sudhaman 18 Jul 2011 // 11:00PM GMT
LONDON--Loewy Group, the marketing services group which owns PR firm Speed, has been acquired by media investment house Writtle Holdings in an all-share deal.
The transaction creates a new entity worth approximately £100m, according to a statement. Writtle already owns PR firm Beyond Communications, alongside such other agencies as 20|20, Arken and Creo Retail Marketing. These will combine with Loewy’s stable of companies, which include Epoch Design, Seymour Powell and Williams Murray Hamm.
The Loewy branding will remain intact. Loewy chairman Will Whitehorn continues in his role and also becomes chairman of Speed.
£4.5m in new capital has also been raised from existing Writtle and Loewy shareholders to fund further growth.
Loewy was previously majority-owned by US private equity houses Veronica Suhler Stevenson and ABRY. The deal follows several years of losses at Loewy, after the company embarked on an ambitious acquisition spree. The group lost £31 million in the three years to 31 December 2009, much of it in write-downs of acquisition costs shown in the balance sheet as goodwill.
“I think it’s a step in the right direction, given the difficulties they were facing,” said Bob Willott, editor of Marketing Services Financial Intelligence.
The transaction comes after Will Whitehorn was named Loewy chairman last year. “As marketing services continue to develop at the same rapid pace as digital technologies and social media, we believe that the winners will be those organisations in the industry that can invest for the future whilst remaining entrepreneurial in their outlook," he said. "Bringing together these two complementary groups creates precisely this environment."
“It is rare to find such a complementary mix between two marketing services groups," said Writtle chairman and CEO Robert Essex. "We will combine Loewy’s renowned brand and excellent operating companies with Writtle’s business model of decentralised growth and equity involvement for key directors to fuel further growth."