The Canadian-born, U.S.-headquartered MDC Partners has acquired a majority stake in Capital C and Kenna, two Toronto-area agencies.
Terms of the deal were not disclosed.
Both Capital C and Kenna, a data analytics firm based in Mississauga, Ontario, were acquired from Newport Partners Holdings, under which the agencies were merged in 2005. Under the new deal, the two shops will again be independently operated.
Capital C CEO Tony Chapman said the initial promise of the Newport deal—more capital for acquisitions—never materialized. “The capital dried up completely. We became a company that was pumping profits on a monthly basis into an income trust that couldn’t give us what we wanted.”
After examining various venture capital and personal investment options, Chapman and his fellow partners chose MDC for its model of allowing partner companies to run their own businesses without top-down interference. The deal actually sees Capital C’s partners increase their own personal stakes in the company.
“MDC really lets entrepreneurs be entrepreneurs with full autonomy,” Chapman said. “We can decide whether we want to crawl, walk or run.”
Capital C has it roots in retail and experiential marketing, but has expanded to become more full-service with the addition of research and content creation divisions. With revenues last year reportedly around $20 million, clients include PepsiCo Food & Beverages Canada, Sun Life Assurance Company of Canada, Scotiabank, Nissan Canada, Andrew Peller Limited, Cineplex Entertainment, Unilever Canada, McCain Foods Limited and Maple Leaf Foods.
As a result of the deal, Chapman said he expects to create a “beachhead” in the U.S. either through acquisition, partnership with another MDC firm or the organic launch of an American office.
“I am thrilled that together we will build upon the extraordinary momentum that Capital C has established, enabling our clients to maximize the opportunities that the changing media landscape and convergence affords,” said Miles Nadal, MDC’s chief executive, in a release.
Kenna’s clients in Canada, the U.S. and Europe include BASF, Nissan and Wrigley.
“Marketing is rapidly shifting from episodic communication to continuous customer interaction and experience management,” said Glenn Chilton, president and CEO of Kenna, in a release.
“We believe that with MDC as our new strategic partner we will be able to dramatically enhance the level of sophistication of our offering and our geographic footprint in the years ahead.”
MDC has made 2010 a year of expansion as Nadal has made a series of acquisitions ranging from PR agencies such as Allison & Partners to other analytic and experiential firms such as Integrated Media Solutions.
“We live in an age of always-on connectivity,” said Nadal. “This is certainly a time when every customer interaction can represent a brand-defining experience and a moment of truth for the consumer. Our partners and management team at Kenna have a deep understanding that brand perceptions and affinities are shaped by the quality and relevance of those interactions across a multitude of channels.”
The deal comes less than two weeks after Taxi, another Canadian independent agency heavyweight, announced it was sold to WPP.
