Bigmouth Media and LBi merge - BDA’s still confused
February 25, 2010
London search engine marketing and advertising provider Bigmouthmedia is merging with Amsterdam-based online brand agency LBi, in a deal that pools €50 million for a beefed-up tilt at the sector.
Bigmouthmedia is taking €40 million in private equity from Carlyle Group, Cyrte and Janivo, and €10 million more due on completion in July, to create a new group, Obtineo; LBi is merging with Obtineo. LBi will hold 51 percent, Bigmouthmedia 25 percent and Obtineo’s new shareholders 24 percent. LBi says the reverse merger sale price is €107.6 million, €68.9 million of which is goodwill.
It creates what the pair call “Europe’s largest digital agency with a headcount of over 1,800 people … with a €50 million fund to strengthen its operations in the US, Asia and the Middle East.” paid content is reporting
Here is the problem, most of the BDA’s still don’t understand how this could be happening. There shouldn’t be Mergers and Acquisitions in this economy. The holding companies are showing all sorts of red on their balance sheet, how could this happen?
The problem is that the Advertising Agency Holding Companies balance sheet is filled with fluff and not enough assets that clients need. Hence why within 5 years the chances are a firm like LBi / Bigmouthmedia might be buying the scraps of WPP group.
Enjoy the new reality.
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