Advertising agency Leagas Delaney is planning to break away from its owner Abbott Mead Vickers.BBDO.
The agency, which is a wholly-owned subsidiary of AMV.BBDO, has billings of 70m and has retained accountant KPMG to value the business. It has already talked to potential buyers.
While Leagas Delaney has yet to decide what kind of deal it is going for, it is unlikely to sacrifice its independence as a separate brand – making the recent TBWA/Simons Palmer takeover an unlikely model.
It could link with another advertising agency network and become either wholly or partly-owned. Alternatively, the management – agency founder Tim Delaney, chairman Jerry Fielder and chief executive Bruce Haines – could try raising money for a management buyout.
There are a number of reasons for the move. Leagas Delaney picked up business from Coca-Cola on the Fanta account last October. This put its parent agency AMV.BBDO in a difficult position since BBDO, which holds a minority stake of 26 per cent of AMV, handles the Pepsi account worldwide. Competitive pressure makes it unlikely that Coke and Pepsi would keep their accounts at such closely linked agencies.
In addition, senior managers at Leagas Delaney are thought to be keen to strike a personally financially rewarding deal.
Leagas Delaney employs 95 staff. Last year it opened its first overseas office in San Francisco on the back of its biggest account – the 20m international brief for sportswear maker Adidas. The US office is 70 per cent owned by Leagas Delaney directors and 30 per cent by AMV and is believed to have racked up losses.