The trend towards agency consolidation is continuing with independent marketing partnerships specialist HS&P poised to sign a deal with dedicated digital agency Crayon.
The merger, expected to be a cash and equity earn-out deal, is still to be signed off, but is expected to create an agency with a head count of 70. It is thought that there will be no redundancies as a result of the merger.
HS&P, previously Hicklin Slade & Partners, is headed by chief executive officer Justin Hicklin and managing director Matthew Brown. Key clients at HS&P include Honda and Diageo.
The union reinforces speculation that mergers are high on the priority list for embattled agencies this year as client budgets are squeezed. It also suggests that the trend for conventional agencies to enhance their digital capabilities will continue to be led by acquisition, rather than organic growth.
It is thought that the Crayon name will remain and the department will run as a brand division within HS&P group. Other divisions include word-of-mouth brand Legends, which launched in January, data.HS&P and Loyalty Practice.
HS&P and Crayon have worked on pitches together, but have no client clashes.
A telephone survey by AlphaZulu Software across 125 marketing and PR agencies in January showed one in four independent agencies faced closure in the next three months and 11% are starting to investigate exit strategies.