Daniel Farey-Jones
Apr 14, 2024

M&C Saatchi to consider US acquisitions to bulk up creative network

A new leadership team will address the group’s underweight presence in the world’s biggest ad market.

M&C Saatchi to consider US acquisitions to bulk up creative network

The holding company M&C Saatchi is to study ways of strengthening its presence in the US, where it has only been able to obtain a limited foothold since first opening in New York in 1995.

Zillah Byng-Thorne, the executive chair who has overseen the company’s recent overhaul, told analysts yesterday that the group planned to “return our attention to the US” later this year following the formal arrival of new chief executive Zaid Al-Qassab next month.

Byng-Thorne admitted it was difficult to truly be a global network without having a strong presence in the US, and described its current set-up there as “fragmented”, although with an “anchor” presence in the form of “award-winning social issues creative agency” SS+K, which is part of its consulting business.

The Americas accounted for only 20% of the group’s revenues in 2023, a much lower share than the likes of giant holding groups such as WPP and Publicis, although the US is the biggest revenue-generating region for its consulting business.

Byng-Thorne said it would be for Al-Qassab to decide, after getting to know the group and having time to think, how to give the advertising side of the group a presence on the continent. The eponymous M&C Saatchi creative agency has a limited presence in New York and closed its Los Angeles office in 2020 as the pandemic raged and the group reeled from an accounting scandal.

However, in a sign of its rekindled ambition the group today revealed the appointment of its first global chief creative officers, Rob Doubal and Laurence “Lolly” Thomas, who will join from McCann London later this year. Al-Qassab, who sat in on yesterday’s analyst presentation, said the duo “wowed” him throughout the recruitment process.

Indicating that M&A is at least a strong possibility, she said: “We’re delighted to be towards the end of the put options [referring to the group’s ongoing disposals of stakes in agencies now judged to be non-core] because that means we can look to reinvest the free cash flow we generate as a business. I would be surprised if we didn’t do something, but it’s got to be right for the strategy.”

In March the group agreed a new $62.2 million (£50 million) bank facility with NatWest, HSBC and Barclays that allows it to borrow a further $62.2 million for strategic acquisitions.

Byng-Thorne also elaborated on the group’s new “regional-first” strategy, contrasting it with the global network ambitions the group laid out at its capital markets day in February 2023, before her arrival last summer.

“At the capital markets day we talked a lot about the global network,” she said. “However, if you look at our businesses just now compared to the major holdcos I don’t really think we’re going to win the global account for Unilever. I’d like to but you’ve got to be realistic—let’s take a look at it in five years’ time.

“Looking at where we’re successful and what clients work with us, we realised that where we win really well is what I describe colloquially as ‘local heroes’—brands that have real recognition in local markets and who we can service locally in an agile and bespoke way but grow with them as they grow globally.

“We can service them in a way that a local boutique can’t. Pretty much every region has everything that we offer and sell and so each region can show up as a full shop, whereas if you’re trying to go global but sell it nationally that was harder to do.”

Campaign UK

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