Gideon Spanier
Jul 18, 2023

Chime to spin off sports marketing arm but VCCP is ‘categorically not’ for sale

VCCP is two-thirds of business.

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Chime is set to split in two with the sale of its sports marketing business, CSM Sports & Entertainment, but the ad agency arm, VCCP Group, told Campaign it is “categorically not” up for sale as part of the process.

Sky News reported on Monday (17 July) that Chime is in advanced talks to sell CSM to US-based sport and talent agency Wasserman.

Both Chime and Wasserman have the same owner, Providence Private Equity, although the businesses are entirely separate, which is likely to make it easier for the deal to complete.

Providence has owned Chime since 2015, when the UK-listed agency group delisted from the London stock market. WPP was a minority shareholder until 2019. Providence bought into Wasserman in November 2022.

Chime did not comment but it is understood an announcement about CSM could come by the end of this week.

There has been speculation since last year that Providence was going to sell some or all of Chime after MergerMarket, a financial news title, reported in February 2022 that a formal sale process was to begin in “the next 12 to 18 months” with VCCP set to be split off and sold. The two businesses are said to operate largely separately.

VCCP has been performing strongly, winning the Virgin Media-O2 consolidation against Adam&Eve/DDB in March 2022, and going on to top the creative agency rankings in the Campaign School Reports tables, compiled by Nielsen, in March this year.

Adrian Coleman, the group chief executive and a co-founder of VCCP, told Campaign: “Are we up for sale? Categorically not. We are a good investment for Providence. They like the business and they like the plan [to expand]. We're growing double digit."

Chime recently posted annual financial results at Companies House in the UK, showing operating income rose 25% to £324m and adjusted earnings before interest tax and other exceptional items (Ebitda) jumped 36% to £56.1m in 2022.

VCCP Group generated 63% of operating income and CSM 37%.

Coleman said: "We had a very good year last year. We invested in the business, made an acquisition in behavioural science and expanded significantly in North America and Asia to win more global clients.

“The UK is a very strong platform and our challenger position works well internationally. We are investing in geographies and capabilities."

Morgan Stanley and Clarity are long-standing advisers to Providence and Chime.

There has been a frenzy of M&A acquisition in the UK agency sector in the past week, with Havas acquiring a majority stake in Uncommon Creative StudioOmnicom Media Group buying Ptarmigan Media and XYZ being taken over by Endeavor’s 160over90.

Coleman was one of four founders who launched VCCP in 2002. Clients include ComparetheMarket, known for its longstanding meerkat ad campaign, Cadbury and easyJet.

VCCP has expanded beyond advertising, moving into growth areas such as customer experience, and it recently launched Faith, a  subsidiary that specialises in generative artificial intelligence.

Source:
Campaign UK

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