Accenture is buying Ausse ex-pat, David Droga’s, Droga5 for an as yet undisclosed amount. The deal is expected to close by May.
The consulting firm certainly has an eye for agencies with strong creative reputations. It acquired The Monkeys in Australia in July 2017, Rothco in Ireland in February 2018 and Kolle Rebbe in Germany in November 2018. In November and December 2018, it also bought ten specialist technology and digital providers across four continents – Adaptly in New York, New Content in Brazil, Kaplan in Stockholm, HO Communication in Shanghai, MXM in New York, Mackevision in Germany, SEC Servizi Spa in Italy, Enaxis Consulting in the US, Zafin in Canada, PrimeQ in Australia and New Zealand and Altima in France.
The acquisition of Droga5 is being hailed as a game-changer in the US. It is the largest agency acquisition the group has made according to price, revenue and headcount. But it will be a small revenue piece of Accenture’s growing portfolio. The company reported 2018 worldwide revenue of US$8.5 billion. In 2017, it was already the sixth largest agency company based on revenue. WPP, Omnicom Group, Publicis Groupe, Interpublic Group of Cos. and Dentsu Inc were the top four.
According to Accenture, its acquisitions respond to a shift in brand building away from creating great ideas to creating great consumer experiences. Accenture chief executive officer stated that it will continue to collect “the right mix of capabilities for the modern day marketer”.
Droga5 has offices in New York and London and a staff of about 600. Its reported 2018 revenue was US$185 million, down 9.8% from 2017’s US$200m, which was its first annual revenue decline since it opened in 2006. The acquisition ends Droga5’s with talent agency, William Morris Endeavor (WME), which acquired a 49% stake in Droga5 in 2013.
Droga5 will retain its agency name, and the management team will largely remain intact. David Droga will remain creative chairman. Sarah Thompson will remain global chief executive officer. Bill Scott will remain UK chief executive officer.
In Accenture’s press release, Brian Whipple, global chief executive officer of Accenture Interactive, stated that the acquisition is “an evolution in Accenture Interactive’s journey to build a new agency model—one with the power to engineer transformative brand experiences and infuse those experiences with the emotional and inspirational power of brand thinking and creativity.
“Joining forces with Droga5 will be a game-changing milestone for us and the industry as we continue to assemble the right mix of capabilities for the modern-day marketer.”