Current agency leaders are writing one of the “great agency stories” says CEO Miles Nadal
Toronto-based holding company MDC Partners has added to its growing agency roster, acquiring a minority stake in Doner with an option to acquire a majority interest.
Financial terms of the deal were not disclosed, although a report in The New York Times valued the transaction at between US$15-20 million.
Doner joins a burgeoning MDC agency roster that includes Crispin Porter + Bogusky, 72andsunny and Kirshenbaum Bond Senecal & Partners. It is the latest in a string of deals, following the January acquisition of independent media agency RJ Palmer and last month’s deal for a majority stake in TargetCast TCM.
MDC chairman and CEO Miles Nadal was unavailable for comment, but told Marketing earlier this year that his objective was to increase the company’s media company billings to as much as US$10 billion in the next five to 10 years.
While Doner is known primarily as a creative shop, it also has a robust media planning and buying operation as well as expertise in production, digital and analytics. Its global billings for clients including Chrysler, Perkins, Dodge and Fiat are estimated at $1 billion.
Headquartered in the Detroit suburb of Southfield, Doner is one of the largest independent agency networks in the world, with more than 600 employees spread across its head office and offices in Cleveland, London and Newport Beach, CA.
Nadal was quoted in media reports as saying he was familiar with its agency through the work its Toronto office, then known as Doner Schur Peppler, did on behalf of Canadian Tire. That office, which opened in 1986, was closed early last year.
In 2005, the Canadian Institute of Communications and Advertising named the agency’s iconic 1990 “Bike Story” ad for Canadian Tire one of the top 10 Canadian ads of all time.
Announcing the deal in an investor call Wednesday, Nadal called Doner “an exceptionally successful micro-network” with an entrepreneurial culture and smart, strategic management.”
The deal caps off a tumultuous four years for Doner, which saw it lose its biggest account, Mazda North America – for which it created the “Zoom Zoom” campaign – and endure both layoffs and leadership changes.
The agency is currently led by co-CEOs David DeMuth and Rob Strasberg, the latter of whom worked at the CP+B prior to joining Doner in 2008. The two men, said Nadal in a release, “have created a potent agency model for the future and are writing the new chapter of what will be one of the great agency stories.”
During the investor call, MDC said that it expected the acquisition – along with other first-quarter investments in media planning and buying agency TargetCast and social commerce agency Dotbox – to add approximately US$50 million in revenues and $8 million of EBITDA in 2012.
MDC now expects 2012 revenues of between US$1.05 and $1.075 billion, revised from its initial 2012 guidance of US$1 billion to $1.025 billion and an increase of 11.3% to 14% over 2011. MDC also announced that it expects its 2012 EBITDA to be between US$110 to $115 million, revised from prior guidance of US$102 to $107 million and an increase of 21.2% to 26.7% over last year.
