Competitive New Agency Emerges In Canada

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Last week, Maxxcom Inc. a division of MDC Corporation Inc. (MDC), Toronto made public its majority stake in Allard and Associates, a Montreal advertising and marketing agency which it acquired as part of a new merger agreement with its marketing communications firm, LBJ/FRB in Montreal.


MDCA said it acquired 50.1 percent of Allard & Associates for C$2.2 million in cash and stock with additional payments due based on earnings performance. The successful negotiation spells the birth of a large new agency just north of the U.S. border to be known as Allard Johnson Communications Inc., Toronto. The new marketing firm will employ 130 people and be one of the top five Canadian-controlled marketing forces in Canada.


Terry Johnson, president/CEO of the new company who was formerly president of LBJ/FRB, said 1999 total billings would top $65 million with total agency revenues for the year of about $16.8 million. Nearly half of the new agency's staff is comprised of creative talent, which Johnson says will give the new marketing firm a formidable weapon in competing against its two largest rivals, Cossett in Montreal & Publicis in Toronto.


"Part of the reason for this merger was to complete our skills sets" says Johnson. "We were always very strong in healthcare and finance but with this agreement we are now especially [well-positioned] in social marketing and advocacy."


Johnson said Canada's growing Internet businesses would provide prospective new client opportunities for Allard as well. He acknowledged that some larger agencies may have been threatened by smaller Internet shops at one time, but he says those days are largely over.


"Our agency's size and talent pool alone will help give us the ability to pick up more clients in Canada" said Johnson. He said his new company would eventually be looking at more expansion in the United States as it sets its sights on new business. He claimed the explosion of smaller and mid-sized "dot-com agencies" in the United States presented little competitive threat.


"I can see that they have an influence and there's certainly a lot of them" he said, but the larger agencies have gotten on board and pulled more Internet services [functions] in house, so they can be more capable of delivering what clients say they truly want: one stop shopping."


Gaetan Bouchard, executive vice president at Allard said "We now have the opportunity to become powerful forces in the two biggest markets in Canada -Toronto and Montreal. In addition, with the strong backing of Maxxcom, we can grow much faster than we could on our own."


In the United States, Maxxcom also has investment stakes and strategic alliances with several leading marketing firms including Colle & McVoy, Minneapolis; Margeotes/Fertitta + Partners, New York; Accent Marketing, Louisville, KY; Cybersight, Portland, OR and Source Marketing, New York.


Maxxcom's parent company, MDC trades on the Toronto Stock Exchange under the symbol MDZ.A and on the NASDAQ under the symbol MDCA. Additional information on the company and its merger is available on its Web site at www.mdccorp.com.
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