WPP Buys Minor Stake in MBC

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British-owned advertising conglomerate WPP Group and its U.S. healthcare communications arm CommonHealth have taken an undisclosed minority stake in Medical Broadcasting Co., which offers digital marketing services to the pharmaceutical and healthcare markets.

MBC claims nearly 20 pharmaceutical companies and associations as clients, including Merck, AstraZeneca, the American Heart Association, Pfizer Inc., Johnson & Johnson, MayoClinic.com and Schering-Plough.

The Philadelphia agency offers industry research, Web design, technology and creative linked to human behavior, medicine and the healthcare system. This seemed to complement CommonHealth's offerings and its focus on direct-to-consumer and mass advertising, medical education, strategic planning and relationship marketing.

"Increasingly, clients are asking to integrate interactive with traditional activities," said Stacey Singer, chief innovation officer at CommonHealth. "We were seeking a partner who would have the depth and breadth of services that matched CommonHealth."

Financial terms of the deal and the equity stake relinquished by MBC were not disclosed.

The MBC stake is CommonHealth's latest effort to ramp up its profile in its healthcare marketing space. Based in Parsippany, NJ, CommonHealth last month spun off its sixth company with the creation of noesis healthcare interactions, a full-service advertising agency.

Focusing on the pharmaceuticals business, noesis follows other CommonHealth spinoffs such as The Xchange Group, MBS/Vox, The Conectics Group, The Quantum Group and Adient.

MBC said it recently launched ePharmaceuticals and the daily e-mail bulletin ePharm5, touted as an e-business intelligence system for monitoring and analyzing the impact of the Internet on the pharmaceuticals industry.

Revenue last year at MBC was $19.6 million.

From WPP's standpoint, the investment in MBC was aimed at boosting CommonHealth's services.

"They really look at most of their investments as an R&D opportunity," Singer said.

It was no accident that WPP and MBC decided to join hands. WPP is known to invest in small shops and add bigger agency brands to its portfolio. So while it was looking to invest, MBC was looking to expand and raise more cash.

"We decided that in order to grow the company, we were going to raise cash through a private equity offering, and the natural route that a company would go through is venture capital," said Richard Altus, chief operating officer at MBC.

"And while we were going through that process, we came in contact with WPP and together we identified synergies that would be possible if somehow MBC would be able to hook up with CommonHealth," Altus said.

Besides, he said, clients today are demanding integrated marketing services. A small shop may not have all services under one roof.

"So, from a strategic standpoint, it made sense that a transaction with WPP made a little more sense than a transaction with traditional venture capitalists," Altus said.

The benefit of the alliance with WPP and CommonHealth does not stop with cash infusion.

"The way it really benefits us by joining hands with WPP and CommonHealth," Altus said, "is that MBC now has a global footprint and a much stronger future in offline opportunities that would complement our interactive business."

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