The Other Side of M&A: A View From The Agency's Perspective


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Marc Landsberg

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The Other Side of M&A: A View From The Agency's Perspective

  1. 1. 1<br />M&A: A View from the other side <br />SIGNAL<br />20 September, 2011<br />
  2. 2. topics<br />IDebunking Some Myths<br />IIObservations:<br />Strategic vs. Financial <br />Services vs. Software/Product<br />IIIHow We Think About Acquisitions<br />IVA Word From our Sponsor <br />2<br />
  3. 3. First, Let’s DeBunk a Few Myths<br />MYTH: There are plenty of “Strategic” deals which disregard financials<br />REALITY: There is no such thing as a “Strategic” deal<br />MYTH: Deals tend to be cookie-cutter<br />REALITY: In fact, Holding Companies are getting more and more creative<br />MYTH: Agencies and Holding Companies move slowly<br />REALITY: true enough, but today, they are working much more quickly, putting IOI/LOIs on the table quickly to lock out others<br />MYTH: Agencies and Holding Companies won’t pay software multiples<br />REALITY: True enough, as a general rule. BUT – if we want an asset badly enough, the pricing can get very aggressive <br />
  4. 4. Strategic vs. Financial Acquisition – My Observations<br />Remember the 80/20 Rule - 80% non-financial metrics:<br />Culture<br />Leadership<br />Approach to Human Capital<br />Innovation<br />Strategic Accretion is tantamount to a deal getting done<br />Additive Services: drive geometric growth not possible stand-alone<br />New Processes, IT, Talent, Capabilities, etc<br />There is no Tomorrow<br />There is no portfolio mentality – every deal must stand on its own merits<br />Agencies are not financial investors looking for exits<br />So, done is done<br />
  5. 5. Straight from the front<br />“Our crew only works with the coolest clients. We pick and choose. Nike, Apple, Adidas…”<br />“We have to maintain our brand. It’s the most important thing to us.”<br />“Once we do the deal, we’d really prefer to be left alone.”<br />
  6. 6. Services-based business: what we buy<br /> We Buy People<br /> We Buy Cash Flow (which includes Clients)<br /> We Buy Geography<br /> We Buy Capabilities<br /> We Buy Magic<br /> And Where Possible…We Buy Scale<br />
  7. 7. Questions we ask ourselves about targets<br />1. 1. How does this satisfy Growthobjectives?<br /> 2. What immediate Clientneeds does this satisfy?<br /> 3. Is the business:<br />In growth mode?<br />In high demand?<br />Difficult to replace?<br />4 . What’s the Competitive Differentiation?<br /> 5. What is the Integration/go-to-market model?<br />
  8. 8. And Now…A Few Words From Our Sponsor<br />8<br />
  9. 9. Our goal, our ambition<br />Our Goal:<br />Drive explosive growth by ensuring that we transform brands and businesses with world-class capabilities in the most relevant domains of marketing services<br />Our Ambition:<br />To be the best acquirer in the marketing services industry<br />To ensure differentiated growth for MWG, leveraging our assets in the most compelling way possible by aligning all resource allocation decisions, globally, against opportunities of greatest value<br />9<br />
  10. 10. True Innovation<br /><ul><li>New to the world, lucrative, client-compelling services; moving up the value chain</li></ul>Defining our priorities<br />Growth at Scale<br /><ul><li>Client needs for services, new geographies. Provides revenue/margin growth</li></ul>Necessary Defense<br /><ul><li>Example: Extending footprint outside of BRIC markets, low cost production hubs</li></ul>Smart Tactical Deals<br /><ul><li>Low risk/quick payback
  11. 11. Example: Books of business</li></ul>10<br />
  12. 12. A few key principles<br />Every Target Has An Operating Home<br />All transactions will be sponsored by an operating unit<br />Regardless of where a deal sits, it will be available to all WG operating companies<br />Deals Do Not Replace Strategy. They Accelerate It.<br />All transactions will start with a specific strategic rationale:<br />Relevant to WG<br /><ul><li>Relevant to clients
  13. 13. Domains of differentiation and growth</li></ul>11<br />
  14. 14. Reaching me<br /><br />@marclandsberg<br /><br />
  15. 15. Thank you<br />13<br />