Update: Agency.com Founders Conclude Share Transfer to Seneca Investments

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The founders of Agency.com Ltd. have sold their 20 percent interest in the troubled interactive shop to Seneca Investments LLC, an investment company joint venture of advertising holding company Omnicom Group Inc. and Pegasus Partners.

With the transaction's completion, Seneca owns 65 percent of Agency.com, New York, up from 45 percent. The sellers were Chan Su, Agency.com chairman/CEO, and Kyle Shannon, executive vice president of the agency's Applied Concepts Lab.

A decision on selling the remaining Agency.com shares to Seneca will come at a special shareholders' meeting Oct. 31. The offer price is $3.35 per share, and its acceptance requires approval from two-thirds of the shareholders.

Seneca has investments in 15 companies, all related to the Internet.

The Agency.com equity transfer comes two weeks after the agency announced the closure of its Portland, OR, office. Two hundred jobs, or 19 percent of its work force, were cut.

In view of this move, the agency said Oct. 3 that it will take a third-quarter charge of $18 million to $23 million. The charges relate to severance pay and real estate costs. The layoffs are expected to save $25 million annually.

Also, a new management structure is in place, focusing on selling the agency's services through a client partner structure. Client partners are senior executives companywide responsible for client accounts. The firm is now aligned along vertical industry segments.

Established in 1995, Agency.com has offices in New York, Atlanta, Boston, Dallas, Chicago, San Francisco and Woodbridge, NJ. Overseas, it has offices in Amsterdam, Copenhagen, London and Paris and affiliates in Australia, Singapore and South Korea.

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