WPP-owned direct and digital agency KBM Group has agreed to acquire Marketing Direct Inc. (MDI), a direct and interactive agency specializing in the healthcare sector. Financial terms of the deal, which is subject to regulatory and shareholder approval, were not disclosed. It is KBM’s second acquisition in two months.
KBM, a division of Wunderman, has rebranded MDI as KBM Group: Health Services. The unit will have both b-to-c and b-to-b services and will be a part of KBM’s enterprise services division.
Dennis Barnes, former president and CEO of MDI, will lead the Health Services unit as president. He will report to Dennis Kooker, KBM Group’s president and COO for enterprise services. All 65 MDI employees are moving to KBM, said Kooker, who added that the companies began discussing a possible deal two years ago.
“It was a combination of being a good time for buyer and seller. We’ve been in talks with MDI for some time now,” he said. “They reached a point of growth where they felt like in order to take the business where they wanted it to go, they needed the broader reach of a larger network like KBM and WPP.”
AdMedia Partners, a mergers and acquisitions firm, served as financial advisor to MDI.
KBM also agreed to buy database company I-Behavior on November 10 for an undisclosed amount. I-Behavior will retain its brand and its data will be used across the WPP network of creative and media agencies, according to KBM. KnowledgeBase Marketing rebranded as KBM Group in October.
Kooker added that the finding the right cultural fit between the two agencies will be the deal’s biggest challenge.
“In this particular case, it’s a good fit from a personality standpoint. At KBM, our focus has primarily been that of a marketing services provider, while MDI has been traditionally a healthcare agency,” he said. “It’s a challenge to bring those agency services and MSP services together for a great whole.”