Gillespie Joins Interpublic's MRM Worldwide Network

Continuing a consolidation trend within the industry, The Interpublic Group of Companies Inc., New York, acquired the Gillespie Organization, Lawrenceville, NJ, a marketing communications agency best known for its direct marketing services.

Though neither company publicly disclosed financial terms of the deal, reports estimated the purchase price at $20 million. With more than $140 million in capitalized billings, Gillespie is one of the largest independent direct response advertising agencies in the United States. The company — which has tripled in size over the last five years — also handles advertising, public relations, event marketing, corporate design and interactive marketing.

Gillespie will keep its name and organizational structure and will operate as a separate unit affiliated with the MRM Worldwide network of agencies, part of Interpublic's McCann-Erickson WorldGroup unit. Gillespie's 120 full-time employees will be unaffected by the buyout, the company said.

Richard J. Gillespie, who founded the company in 1973, said his firm received five buyout offers from domestic and international agencies over a 90-day period in the spring, then another two offers in the last few months. He expects the firm's agreement with Interpublic to help Gillespie meet its long-term growth objectives.

“We set out a goal a little over a year ago that we wanted to … be a $500 million agency within five years,” he said. “We grew about 25 percent just this past year. But clearly, we felt that our involvement with Interpublic provides us with access to research, the technology [and] to some Web and Internet e-commerce types of services that will really help us grow, not to mention their international network.”

Interpublic, which trades on the New York Stock Exchange and employs more than 27,000 people, also operates advertising networks Ammirati Puris Lintas and The Lowe Group, as well as communications services units Western International Media, Draft Worldwide, Allied Communications Group and Octagon.

The acquisition of Gillespie is MRM's seventh since it was formed in January 1997. Just last week, it announced the acquisitions of three agencies in Tokyo, Sydney and Madrid, whose combined billings were reported at $60 million. Consolidation among marketing and communications agencies increasingly reaches across borders as companies expand their overseas reach, and Gillespie sees the combination with Interpublic as an example of that trend.

“Much more of the client activity is, if not totally global, looking at international opportunities,” he said. “It's very difficult as an independent to be able to build those kinds of links that really would give a client the kind of high-quality service they require.”

Larger organizations are more able to stay on top of technological changes within the industry, he said, particularly in the direct marketing end of the business and on the Web.

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