Respond2, Cmedia Join With ATC Agency Services

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Creative agency Respond2 and media buying shops Cmedia and ATC Agency Services combined to form a direct response television agency with annual billings exceeding $200 million.

Lake Capital, owner of ATC Agency Services, is the largest shareholder in the new, as yet unnamed, holding entity. Each agency constituent will maintain its identity.

"The big vision here is that with the addition of ATC, we hit critical mass where we are amongst the biggest [independent] players," said Tim O'Leary, CEO of the holding agency. "We're very technology oriented, and we want to take our tracking systems to the next level. The expansion and the added resources will allow us to fine-tune that."

The deal also brings duplication and production house Production West and entertainment marketing firm R2 Entertainment. They are part of Respond2 and Cmedia, both firms and its subsidiaries in which O'Leary and his wife relinquished majority control to Lake Capital. Terms were not disclosed.

O'Leary will continue to head Respond2 as CEO, as well as head the overall group. His wife, Michelle Cardinal, is group president and stays on as CEO of Cmedia. They will continue to work out of Portland, OR, which is the group's headquarters.

David Savage and Marilyn Davis, cofounders of ATC Agency Services, which Lake Capital bought in February, will serve as executive vice presidents of media services. They will stay in Philadelphia. Senior management and staff at other companies keep their jobs.

"Part of the beauty of the deal was that there was no real duplication," O'Leary said. "We didn't need to get rid of anyone."

Respond2 is a specialist in creative and production. Clients include America Online, Philips Electronics and Invacare, maker of elderly-care equipment. Cmedia and Production West work on some of the same clients.

R2 Entertainment does video and music marketing for Johnny Carson Productions and the "This Is Your Life" show. The firm, which caters to celebrities and their estates, also handles the video libraries of Bob Hope, Sonny and Cher, Tony Orlando and Dawn, and Rodney Dangerfield.

"We're very much in a growth mode and have a growth strategy," O'Leary said. "We're going to take a look at our internal capabilities and systems and see how they can be combined to better serve clients. Second thing is, we're going to come up with a definitive growth plan that includes acquisitions."

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