Close-Up: Live Issue - How does the merger of Farm and Leith add up?

The combined agency has a greater weight in London, but will it suffer from top-heavy management, Emma Barns asks.

According to all of the parties involved in the deal, the merger of Farm Communications and Leith London last week had nothing to do with combining one small and one struggling agency to make a bigger, healthier whole. It is, they say, all about aggressive growth.

The new arrangement, which sees Cello Group acquiring Farm and slotting it in with Leith, will result in a 40-strong agency managed by a joint team from both agencies.

Mark Scott, the chief executive of Cello, explains that the aim is to create a bigger force in London. He makes a point of stressing that the agency will be up to around 50 or 60 staff by next July and adds: "Our objective is to double the size of the business in the next year."

Jeremy Pyne, the former Leith managing director and the new agency's joint managing partner, also says that the deal is about adding scale.

"There comes a point when you want to get on bigger pitches, but you're not considered if you're not a certain size," he says.

A name and a base for the merged shop are still being discussed. However, the positioning of the agency as "thinking-led" has already emerged. Pyne explains that planning will come first, with creative afterwards, saying: "Cello is a top-end, thinking group and it makes sense for us to start with this in whatever we're doing too."

Pyne also believes developing a more integrated offering is key. Leith London has recently brought direct marketing in-house and he adds that digital, PR and sales promotion could be brought in as well. "It's not brain surgery, it's about building our capability," he says.

The deal seems especially attractive for Leith London, which recently lost its Carling client. The business accounted for 35 per cent of its billings. Merging with Farm means the agency will pick up some much-needed clients such as smile.co.uk and Smart, as well as a place on the COI roster.

Paul Jeffrey, Farm's planning partner, says: "It's going to give both agencies a boost and new momentum. It will energise us all."

Suki Thompson, a managing partner at The Haystack Group, agrees the deal was something both agencies needed. "They're both nice, jobbing agencies which don't really do enough. Maybe combined this will sort them out. If they hadn't done anything, they would have struggled to survive."

One obvious stumbling block seems to be the fact that a quarter of the new agency team will be management. Rob Smith, the Farm managing director, will sit alongside Pyne as a managing partner, Leith's John Rowley takes the chief executive position while the four creative directors and two heads of planning from both agencies will unite at the new agency.

"Why does a business need four creative directors and two MDs when it's that size? It'll work OK if they all have a clear place, but if things go slowly it could turn into a bun-fight," a rival agency head says. Scott argues its large senior team gives the agency the ability to pitch and retain clients of an increasing size. Whether they'll be able to agree on a name is another matter.

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