Cossette pays £7.8m for MCBD

LONDON - Miles Calcraft Briginshaw Duffy has sold a 51 per cent stake to Cossette Communication Group as a prelude to an eventual takeover.

The move is part of a six-year, three-stage deal which saw the Canadian marketing group pay an initial £7.8m cash for a majority stake in MCBD. It also includes its marketing arm, Elvis.

The second phase of the deal will start in three years' time, when Cossette will have the option to increase its ownership to 75%. The fee will be based on current predictions of future growth and profitability.

The remaining part of the deal will be actioned in five years, when Cossette will have the option to take 100 per cent ownership of the agency.

The group estimates that the agency's final price could be as much as £27 million. For this to happen, MCBD will need to grow substantially and continue its recent run of new-business success that has seen it win accounts including Jet, Subaru and Debenhams.

The Cossette deal ties the MCBD founders and principle shareholders Jeremy Miles, Helen Calcraft, Paul Briginshaw and Malcolm Duffy into the agency for the next six years.

Miles told Campaign that despite offers, the agency's founders had no interest in selling up and getting out of the business quickly. He said: "We wanted to find a partner who shared similar values to us, in terms of people and product. We have had many suitors and declined them all over the past three years."

He added: "This deal gives us access to an international network and it gives us access to many talented people in the integrated communications business. There's a lot we can learn from Cossette."

The move is the latest part of Cossette's plan to build a full-service independent global network. The group is already well represented on its home turf, owning above-the-line, direct and media outfits in each of Canada's main cities.

In December 2003, the group took its first steps towards international expansion, purchasing Identica, a UK-based brand consultancy, which now has offices in New York and Shanghai. Ten months later, it bought the public relations company Band & Brown Group.

Claude Lessard, Cossette's chairman and chief executive, said: "This acquisition rounds out our convergent communication platform, by adding advertising, sales promotion and direct marketing to branding, design and public relations."

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