Aegis Group, which owns the Carat and Vizeum media buying agencies, out of home agency Posterscope and digital network Isobar, achieved organic growth of 9.9 per cent in 2011 (12.2 per cent in the last quarter) as profits soared to £197m from an adjusted figure of £151m. Its income rose 21 per cent to £1.14bn.
Aegis is now valued at £2.10bn (about a fifth of WPP) which must be pleasing for biggest shareholder Vincent Bollore, who will also soon be trousering over a quarter of a £200m special dividend. But it means that Aegis is now much bigger than Bollore’s other advertising interest Havas, currently worth £1.44bn. Hopes that Havas would one day buy Aegis therefore look more fanciful than ever.
2011 couldn’t have turned out much better for Aegis and CEO Jerry Buhlmann (pictured). In the summer it managed to offload slow-growing research business Synovate to French researcher Ipsos for a healthy £525m and in December Carat won the $3bn General Motors media account from Publicis Groupe’s Starcom although the appointment wasn’t confirmed until February this year.
This is believed to have been caused by some protracted horse trading over fees with Carat eventually striking a deal promising it would make little or no profit for the first two years of a five year contract. Even so the GM appointment shows that Carat and Aegis are now definitely playing in the big league against more diverse marcoms companies like WPP, Omnicom and Publicis Groupe.
Will one of its bigger rivals come shopping for Aegis? A successful bid would need to be closer to £3bn than £2bn, which is probably out of the reach of everyone apart from WPP and Omnicom. But WPP enjoys a dominant share of some media markets already (including the UK) through its GroupM media agencies which include MediaCom and Mindshare. Aegis’s Carat would fit very well alongside Omnicom’s OMD and smaller PHD however.
CEO Buhlmann, who has made a string of mid-sized acquisitions in the past year, including digital agency Roundarch for $125m, may decide that he needs to get bigger sooner rather than later, just to be on the safe side.