Global communications firm WPP had to beat off competition from five other interested parties to acquire a majority stake in South African ZAR68 million (US$6.5 million) marketing agency Quirk, according to Quirk chief executive officer (CEO) Rob Stokes.
HumanIPO reported earlier this month on the acquisition of Quirk – which currently has five agencies in Africa and the United Kingdom (UK) and clients including Distell, Capitec, Woolworths, Hollard, Makro, Unilever, Caltex and Tyco – with WPP saying the investment aligned well with its strategy of developing its services in fast growing markets and sectors while strengthening its capabilities in digital media.
Stokes told the sixth annual Net Prophet event in Cape Town there had been interest in Quirk in previous years, but the level of interest this time round – with six companies expressing an interest – had made a deal more attractive.
“When it got to six, we thought “hang on, maybe we could do something on our own terms”,” he said.
He said WPP eventually clinched the acquisition because the company seemed like a “culture fit”.
“I don’t think we could have got a better deal for our business, for ourselves, for our clients. I see this as a more exciting chapter too,” he said.
“I had a list of 46 non-negotiable items, they gave us all of them. They were great at doing a negotiated compromise. And in the end it was a culture fit. It took four days to due the due diligence, and I like that. The world is fast and you have to be quick.
“Although the shareholders are different, the adventure remains the same. We still want to change the world.”
He said Quirk had first been approached over a buyout in 2009, and though the time had not been right to sell he said it spurred the company to make sure it was in a position where it could be an attractive acquisition.
“If we had gone through a due diligence process we would have been laughed at,” he said. “Even if you’re not for sale you never know when the opportunity will arise, so make yourself saleable.”
Stokes said Quirk had to some extent been lucky in finding itself in the vanguard of the growth of digital marketing in South Africa in 2007 and 2008.
“Timing actually does matter. The problem is it is hard to predict. If you’re selling something that nobody is buying it is a waste of time,” he said.
“We happened to be in the right place at the right time but I think our perseverance put us there.”
He said being generous with knowledge had helped the company establish itself, with Quirk realising few people understood digital marketing and writing a textbook on the subject which it then gave away for free online.
“I think a lot of people hold onto their ideas, I think if you give them away there is some kind of weird idea of karma.”
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