Media Experts founder and CEO Mark Sherman honestly can’t recall how many times he’s said “No deal.” Not surprisingly, countless agency groups have asked the head of Canada’s largest independent media agency to sell over the years.
Some of those entreaties produced exhaustive discussions he described as “very detailed.” Others, said Sherman with typical candour, “caused me to wash my hands immediately afterwards.”
But, everything started to change in November of 2014. That’s when Sherman first began talking with Interpublic Group, owner of IPG Mediabrands – Canada’s fifth largest media agency group, with combined 2014 billings of $1.08 billion split between its UM Canada, Initiative and m2 Universal networks.
On Wednesday, almost exactly a year after those discussions began, IPG announced it had acquired an undisclosed majority interest in Media Experts, by far the largest of Canada’s independent media shops with 2014 billings of $360 million, according to French research firm RECMA.
The deal was finally completed (pending Competition Bureau approval) around 8:20 p.m. the night before. In his Montreal home, Sherman kissed his wife and celebrated by drinking a “nice glass of red wine” and eating a rib steak.
Actually, that’s not completely true. “I started drinking well before the finish line,” he said with a laugh. “At the end of these things it’s changing this word and that word, and the revisions flying back and forth between the lawyers, but the deal was really done a long time ago.”
Speaking with Marketing on Wednesday, shortly after making an emotional address to his approximately 150 employees, Sherman said it quickly became apparent there was a cultural fit between the two companies.
“We met these people, we liked these people, we spent time with these people and we all got along very well,” he said. “These deals are not an easy thing to do: they require a lot of willingness and desire on both sides. Together we made a deal I think is great for both companies.”
For Sherman, the transaction is about ensuring an enduring legacy, both for him and the company he launched in Montreal in 1981 – transforming it through a combination of hard work and business acumen into an independent powerhouse with a client roster that has grown to include Bell, Best Buy, TD and WestJet.
“I started Media Experts in 1981 with three people,” he said. “Today we have 150 and we’re the largest independent media firm in Canada.
“Without this transaction, there’s little chance Media Experts would exist in 2030. I’ll be 74 years old in 2030, so this is part of a plan to ensure the continuity of the company for many years to come.”
The deal radically reshapes Canada’s media agency landscape, with the addition of Media Experts’ billings pushing IPG Mediabrands into third place among media holding companies with combined billings of $1.45 billion – ahead of Publicis ($1.28 billion) and Dentsu Aegis ($1.23 billion), and behind market leader GroupM ($2.09 billion) and Omnicom Media Group ($1.86 billion).
Even though yet another independent agency has been absorbed by a global holding company, Sherman said there is still an opportunity for entrepreneurs to enjoy the same level of success.
“Setting off into business on your own, whether it be in 1981 or 2015, takes a certain type of person who is able to look fear in the face,” he said. “The landscape is becoming increasingly challenging, but Media Experts has been extremely competitive with its global competitors in Canada.
“We have to this date been a very successful business as an independent, and there’s no reason there couldn’t be another one,” he continued. “I would say with all of the right ingredients, the answer is yes.”
For IPG Mediabrands’ Canadian CEO Harvey Carroll, the transaction not only adds scale and bolsters his company’s presence in Quebec and Western Canada – it leads to what he called a “reinforcement” of the company’s existing entrepreneurial culture.
“While I fully expect that we will bring a lot of benefits to Media Experts, I’m equally sure we will learn from them,” said Carroll. “There are certain advantages to having size and scale, but there are also certain advantages to being a bit of a scrappy fighter and finding innovative ways to compete when you don’t have a global network supporting you.”
Carroll said his previous entrepreneurial experience as a president and partner with Grip Limited, the independent full-service agency he left to join IPG Mediabrands in 2013, enabled him to quickly find common ground with Sherman during negotiations.
“I have a lot of respect for independent agencies and their ability to build a business as significant as Mark’s,” said Carroll. “We were able to connect on that level, understanding what it’s like to not be one of the big guys, but build up a sizable business.”
Media Experts will continue to operate as a separate and distinct entity under the IPG Mediabrands umbrella, with Sherman joining a senior leadership team led by Carroll, who said he is “incredibly proud” to be able to pull of a deal that ranks among the largest agency transactions in recent years.
“I have aspirations for us to continue our successful growth, and I see this as a landmark,” he said. “Media Experts is an incredibly successful and talented organization, and the last significantly-sized independent.”
For his part, Sherman said he has yet to sit back and contemplate his agency’s transformation from small independent to part of a global holding company.
“I think you would do that at the end of a journey, and I’m not at the end of a journey,” he said. “I intend to be running this company five years from now, perhaps longer. I have no interest in scaling back my activity. I want to ensure that Media Experts exists for the long term.”
