- Abbott Mead Vickers Group has sold its second-string agency, Leagas Delaney, for £4 million to its management, led by chief executive Bruce Haines and executive creative director Tim Delaney.
The disposal, which has taken a year to complete, comprises Leagas Delaney in the UK, which Abbott Mead wholly owns, and AMV's 30 per cent shareholding in Leagas Delaney's San Francisco operation.
Haines becomes group chief executive and Delaney chairman of the newly-formed holding company, the Leagas Delaney Group. This owns Leagas Delaney London (including satellite shops in Paris, Barcelona and Rome) and the two year-old San Francisco agency.
The buyout has been financed privately by Haines, Delaney, chairman Jerry Fielder, finance director Eric McClean and Margaret Tully, planning director.
The £4 million cost comprises £100,000 in cash, £1.2 million in redeemable participating preference shares and £2.7 million in the form of a loan note secured on the assets of the Leagas Delaney Group. Abbott Mead's preference shares represent 30 per cent of Leagas Delaney Group. Leagas Delaney shareholders have the option to purchase these shares over time.
Leagas Delaney was sold to Abbott Mead in July 1986 following the departure of founder Ron Leagas. It was Abbott Mead's first acquisition as a public company. At the time, Leagas Delaney claimed billings of £12.7 million. Haines, then an Abbott Mead director, joined Leagas Delaney as managing director.
Last year, Leagas Delaney posted billings of £43.3 million. The agency had a successful year, winning business including Nationwide and BBC Digital and creating award-winning ads for Adidas and for the BBC, most memorably with "Perfect Day".
An official Abbott Mead statement commented: "Leagas Delaney is a UK advertising agency and Leagas Delaney Inc was established to operate under the Leagas Delaney name in the US. Both companies have been managed separately and have their own client base with little overlap with that of the rest of the Group. As a result it is anticipated that the disposal will not have any significant impact on trading in other group business."