Cello plans to expand Leith by merger after purchase

Cello Group, the marketing services company that is in the process of purchasing Leith, is planning to expand the Edinburgh-based agency by merger if the acquisition succeeds.

Cello has been set up as a holding company for The Leith Advertising Agency, Target Direct and the healthcare market research company Insight. It is planning to float on the Alternative Investment Market.

The company's senior management team, the former Media Square non-executive chairman Kevin Steeds and the ex-WPP Group director Mark Scott, have pledged to stay out of the day-to-day running of the agencies and will keep the existing management teams in place.

However, Scott told Campaign that he wishes to see the three subsidiaries expand under Cello and intends to buy a small advertising outfit to merge into Leith as a means of immediate growth.

"In the case of Leith, we'll add a few bits to augment its proposition," he said. The agency also has a London-based operation and its clients include Standard Life, Carling and Visit London.

"Each of the three companies has plans of its own and we're facilitating them. They all do different things and we want them to continue to focus on what they do well and on growing themselves with our help," Scott said.

He added that all three senior management teams will sit on an executive committee.

Once floated, Cello will control 55 per cent of the issued share capital, with the agency directors holding the rest.