PHD partners hit jackpot in 13m AMV takeover
Abbott Mead Vickers.BBDO will pay 12.6m for Pattison Horswell Durden, if their new media operation, New PHD (MW May 31), hits all its profit targets.
The price was revealed to the City following the signing of the deal to acquire PHD, and merge it with AMV’s media department last week.
An initial payment of 4.1m has been made to the three partners, who own 26.7 per cent of the company each, and to John Ayling, managing director of John Ayling & Associates, who owns 20 per cent.
A further five additional payments, related to profits, will be made until December 31 2000. In previous acquisitions, AMV has had a history of offering very high earn-out targets but also large rewards to enable new employees to profit from success.
In addition to the payments to the three PHD partners, AMV has created a profit-bonus scheme for all of the New PHD senior management. The scheme is intended to keep all of the merged management on board.
With the completion of the deal, the senior management is now looking at the structure of the new company. It is believed that the restructuring will be completed, and the companies merged, in August.
Included in the new structure will be a head of TV buying, yet to be hired. The new company wants a buyer with a reputation for toughness, to balance the planning-based credentials of the two agencies.
