The acquisition enables London-based LBi to add features to its existing social media offerings, including word-of-mouth, student marketing and consumer participation generation tools.
“The one area we were obsessed by was social marketing,” said Taylor. “Demand was massively outdoing supply.”
Mr Youth will receive $30 million for the acquisition but can earn up to $50 million depending on the company’s earnings before interest, taxes, depreciation and amortization “over the next few years,” said Taylor. He would not be more specific.
Taylor said LBi spent a year “looking at” about 10 to 15 companies, but LBi ultimately determined Manhattan-based Mr Youth was the best target because “they were absolutely the category leader because of the quality of their people, they work with the most sophisticated brands, and they had brilliant intellectual property.”
Mr Youth has 140 full-time employees and expects net sales of approximately $25 million in 2011, Taylor said. No layoffs will come as a result of the acquisition, he added.
Matt Britton will remain CEO of Mr Youth and will report directly to Taylor.
“He will continue running Mr Youth,” said Taylor. “His focus will be making the agency global.”
Mr Youth’s client roster includes The Coca-Cola Co., Procter & Gamble and Microsoft Corp. LBi’s clients include Johnson & Johnson, Bristol-Myers Squibb and Sony Ericsson.