Is Droga5 the next item on Accenture’s menu?

Whatever you say about the agency holding companies – and we do – they have a certain track record in absorbing and maintaining their big agency acquisitions. Other deals may not run as smoothly, there’ve been stories that the UK’s engine Group and California’s Lake Capital haven’t always seen eye to eye and now the New York Post has reported that all’s not well twixt William Morris Endeavor (WME, now Endeavor) and Droga5. WME bought 49 per cent of D5 in 2013 in a deal which valued D5 at around $225m.

Almost inevitably there’s speculation that Accenture may move in.

The likes of Lake Capital trade companies routinely, Endeavor was supposed to be a partner in a more ambitious enterprise, building an advertising to broadcast group. But D5’s fortunes have stuttered somewhat in recent years, it led the way with a round of redundancies among New York agencies earlier this year. Its London outpost has undergone a number of management changes since starting three or so years ago although it appears to have stabilised now. But all such moves are expensive.

Accenture has already bought Karmarama in the UK, Ireland’s Rothco (which won a Cannes Grand Prix), The Monkeys in Australia and a number of digital agencies including some in the US. D5 would give it a big leg up in the US market although it’s not the only consultancy buyer in town. PwC had a big presence at Cannes (as did Accenture) and Deloitte has bought a number of digital agencies.

Update

Droga5 says “Endeavor has been a strong partner and minority investor in Droga5 since 2013. We’ve enjoyed a fruitful and mutually beneficial relationship with them, and continue to do so,” pointing to a number of joint projects, some of which have involved advertising others not.

It also points to growth in its US business and says that the UK office, which opened six years ago, is now producing good work (which it is) with more clients, some of whom haven’t been announced.

It says it has no plans to sell to Accenture. All of which we’re happy to accept although, as one of the few big creative plums not part of an agency holding company, Droga5 will certainly appear on a number of other companies’ wish lists, circumstances permitting.

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