Sir Martin Sorell, the most influential advertising mogul, who employs over 205,000 people in over 2,500 offices in 107 countries across the globe is the living proof of how acquisitions can help you scale up your business and let you be the high priest who rules the industry.
The WPP group (Wire & Plastic Products) is a conglomerate of advertising agencies, which initially was started as a shopping basket manufacturer, but soon became a Marketing & Advertising behemoth when Sir Martin Sorrell came on board as its Chief Executive. Sir Martin Sorrell was a respected financial guru even before he joined WPP. After joining WPP, he acquired 18 BTL ad agencies in a short period of 3 years.
In the year 1987, he did the unthinkable, by taking over JWT for a staggering $566 Million. In 1989, he again did what others thought was impossible – acquisition of Ogilvy & Mather for $825 Million. In the year 2000, he again acquired Y&R, Omnicom and the Grey group. With these major agencies under his belt and a few other market research and P&R agencies, WPP is one of the most influential Marketing & Communications group in the World. The amounts mentioned are staggering considering the very few Billion Dollar deals that happened back then. WPP has a revenue of over UK Pound 14.4 Billion. This makes them the largest group in terms of the billables that they send to clients. Every major company in the world uses their services.
The reason for us sharing this example is to highlight the fact that WPP was never a strong ad agency in terms of its creative bent of mind. It actually built its creative & financial muscle through financial discipline. It managed to keep its finances in check and was able to leverage this to buyout much larger companies than itself. This allowed it build its business straight away without worrying about recruitment, client acquisition and other headaches that a company usually has. This allowed the acquired companies to function as they have normally done without any changes (barring a few at the top) and has allowed them to focus on doing what they do best – great advertising.
The acquisition gave the WPP group access to a lot of the funds that these companies have and thus focus exclusively on growing other companies that can be taken over or other group companies that need support. Thus, the senior management is able to solely focus on core activities that help the group grow, while a team is also in place to manage the daily operations.
These are the advantages of a well planned merger & acquisition strategy. There are many such examples in history which prove M&As as the best way to grow your sales, employees, geographical footprint and your financial prowess.
The best way to scout for such lucrative deals and the best way to finance them is to be in touch with the right people. Networking and learning is the best way to do this and doing it at the heart of Mumbai is a sure shot way to move ahead. BSE Institute Ltd (BIL) offers a short term course in M&As.
Mergers are tough to crack and one needs a large team of lawyers, bankers and CAs to get the deal completed. Only and only through a thorough study of the industry can one achieve it.
Once completed – Sky is the limit and you can be the next Media Mogul!