Opinion: Perspective - Why CHI looks likely to avoid a similar fate to HHCL

When Clemmow Hornby Inge launched in 2001, advertising industry lore held that embedded in the agency's DNA was a plan to sell after five years.

And whenever the CHI-ers insisted that their commitment to their business actually went a little deeper than that, well their protestations never really seemed absolutely convincing. The agency has always been such a ferocious new-business machine that any passions for doing great work have been shadowed by relentless growth (a problem many other agencies would love to have).

Well, if there was a timetable, CHI missed it. The agency is now six years old. And it has also defied the cynics by selling only a (hefty) minority stake, so retaining independent control. And the fact that it hasn't got into bed with Havas, as expected, but got cosy with WPP is another neat twist that has confounded observers.

It's a beautiful deal for CHI. By (deliberately or inadvertently) engineering a tussle between Havas and WPP, the company has extracted a good price for the 49.9 per cent it has sold. Though the usually candid Johnny Hornby won't talk wads, and though Sir Martin Sorrell isn't famed for over-paying, the figure apparently nudges the top end of £20-something million on a multiple of ten. And let's just say the founders seemed pretty happy with themselves this week.

The idea is to "do a BBH" (Publicis, via Leo Burnett, owns a minority stake in BBH) and apparently Nigel Bogle lent a hand in the structure of the CHI/WPP deal. In fact, "doing a BBH" has become an industry shorthand for a first-class agency model. Anyway, like BBH/Publicis, this one seems to be a win-win for both sides, offering scale and resource (and continued self-interest) to CHI and a shrewd investment (on performance to date) for WPP.

And it instantaneously plugs two very big holes in CHI's foundations that will shore the agency up for the future. CHI gets access to international resource and a full-on media partner through WPP's Group M.

For Sorrell the deal is a little harder to fathom beyond the obvious, and attractive, chance to buy a share of an agency with margins said to be almost double the industry average. CHI is essentially a traditional agency at a time when the must-buys are in the digital space. But its Hall Moore CHI offering, its Big Ideas approach and its determination to raise its media game all make for a persuasive integrated offering at a time when integration is becoming a Holy Grail.

At heart, CHI is a hungry agency with a decent - rather than dazzling - creative product and a modern approach. More than that, though, despite having a reputation as a sweatshop, CHI has an attractive layer of talent (Hornby remains one of the industry's most charismatic and persuasive chiefs) and, in its founder client, Charles Dunstone of Carphone Warehouse, a big, rock-solid and growing relationship at a time when such client loyalty is increasingly rare.

And, of course, by buying CHI, Sorrell has thumbed his nose to Havas and any other holding company that might look at the UK market and wonder what's worth buying. With CHI out of the equation, the answer is "not much": Mother's price tag, though, has just ballooned nicely.

Some words of warning amid all the back-slapping though. Look what happened to HHCL after WPP took a minority stake; and Miles Calcraft Briginshaw Duffy has lost momentum since selling its minority stake to Cossette. Leveraging the best from a large-minority shareholder while meeting stringent targets is an extremely tough act to pull off in the current agency climate.

But unlike Cossette, WPP has more attractive group companies for CHI to plug into to enhance its offering. And Sorrell cannot afford to repeat the HHCL mistakes. And at the end of the day, I'd bet my money on Hornby before the rest.