John Singleton’s STW Group Ltd has taken ownership control of The Brand Agency, only months after the agency shrugged off rumours of a further buy-up by the communications services group.
John Singleton’s STW Group Ltd has taken ownership control of The Brand Agency, only months after the agency shrugged off rumours of a further buy-up by the communications services group.
In August, WA Business News reported that Perth-based Brand Agency management believed there were no plans to change its current ownership structure.
However, Brand Agency CEO Ken James has said the recent take up of a further 26 per cent shareholding by STW had been on the cards for some time.
“STW wish to involve us more constructively in the future of communications within Australasia…[So] The Brand Agency Board has agreed to STW’s request to increase their shareholding to 75 per cent effective immediately,” he said.
Mr James said the present management’s running of the agency wouldn’t be affected by STW’s further buy-up.
Since mid-2003, STW has held a 49 per cent stake in The Brand Agency under a deal whereby STW had limited capacity to change the agency in the first three years and after that only if profits dropped significantly.
However, according to STW executive chairman Russell Tate, the further buy-up was more to do with The Brand Agency’s ability to outperform its targets.
“Since we first bought a stake in them in 2003, The Brand Agency team has consistently over-delivered on agreed targets and has become something of a role model as a member of the STW family of companies, encouraging and facilitating collaboration between group companies for the benefit of their clients,” Mr Tate said.
While STW didn’t disclose a purchase price, the group did announce that the cost of three acquisitions, including the Brand Agency, would be for $39 million in cash, with transactions effective in the December 2006 quarter.
STW’s other two purchases were for 100 per cent of brand and design agency Moon Design and 90 per cent of Ikon Communications, as well as 49 per cent of Ikon’s recently formed associate company, New Dialogue.
The company’s board is expected to remain as it was before the purchase, with seven representatives of The Brand Agency and two representatives of STW making up the board.
The STW deal provided The Brand Agency with the scale to operate effectively in the national market with its major clients, Bunnings and BankWest, expanding their presence to the eastern seaboard.
BankWest, Bunnings and RAC were ranked in the top five most recognised WA brands, according to advertising and marketing professionals surveyed for WA Business News’ branding feature earlier this year.
In the 2006 WA Business News Book of Lists, The Brand Agency was ranked second to Marketforce Advertising in terms of billings and staff.
The agency had billings of about $100 million for 2005-06 with 70 staff and a turnover in the order of $21 million.
Meanwhile, Trilogy Advertising & Marketing and Core Marketing Group have merged, with Core’s five staff relocating to Trilogy’s Subiaco premises following Core principal, Yvonne Renshaw, selling the company’s East Perth office.
