Next 15 ties up ODD deal for Engine UK – yet another home for fabled WCRS

Tech-based marketing group Next 15 is acquiring of Engine UK from Lake Capital in the US for £77.5m, £20m or so less than Lake paid a few years ago. Next raised £50m from shareholders to fund the deal. Engine made nearly £12m ebitda (earnings before lots of costs, which can be deceptive) last year so the price looks a steal.

Engine employs about 600 staff across three divisions: communications, creative and “transformation.” Next describes itself as a transformation specialist (but doesn’t everyone these days?)

Engine will merge with Next agency ODD under CEO Phil Fearnley. Fearnley is a fully paid-up member of the digerati, having worked at the BBC for over seven years, latterly on the myBBC digital programme.

Engine includes the former WCRS, the fabled agency founded by Robin Wight, Ron Collins, Andrew Rutherford and Peter Scott. Scott led Engine before the sale to Lake Capital. Engine clients include Santander (below), E.ON, Sky, Cazoo, the Cabinet Office and Warburtons.

Next CEO Tim Dyson says: “Acquiring this broad-based digital transformation, communications and creative business fits well with our track record and strategy of adding growth businesses that then contribute to our target of doubling the size of our business in the next three to five years.

“Its three businesses are home to great talent and strong client relationships and provide multiple opportunities to expand and further apply our growth consultancy services.”

Next 15, originally based on PR, is another of the digital first marcoms groups impinging ever more strongly on the territory of the big ad holding groups. Others include Jellyfish and Croud (which is expanding in the America), MSQ plus the more high profile S4Capital (Sir Martin Sorrell’s new venture) and David Jones’ BrandTech Group.

Creative agencies, although still highly profitable in good times, can be delicate flowers too and it will be interesting to see if Engine prospers under Fearnley and his boss Dyson.

This is an updated version of an earlier story.