Publicis to acquire Capital Advertising

French advertising major Publicis Groupe is buying out Capital Advertising lock, stock and barrel. Capital is perhaps one of the last mid-sized Indian agencies along with Madison who are thriving on their own steam in the intensely competitive advertising and marketing space.

Set up in 1992, Capital’s large clients include businesses from LG and Maruti. The deal is being done through Publicis’ Netherlands subsidiary.

According to ad industry sources, Capital, just like Sam Balsara’s Madison, has been on the radar of several communications majors, including McCann Erickson. Early last year, Michael Berkin, the vice-chairman of global major Omnicom, held discussions with the promoters of Capital, Sunil Sachdeva and HV Subramaniam, to partner the agency and use it as the launch pad for the group.

“Global networks like Publicis and Dentsu, who have been late entrants to India, suffer from an inferiority complex-of-sorts. They all want to be respectable competitors to WPP and are therefore hungry for acquisitions to build scale,” said a industry source. “And this is the best time to do it.”

India’s blazing growth has thrown up several emerging sectors, with bulge-bracket marketing spends prompting global networks like the WPP group (it owns JWT and O&M), Publicis, Dentsu and IPG to look at acquisitions in every possible area.

By acquiring Capital, Publicis will build scale (around Rs 100 crore billings annually) in the traditional ad space. Also, it can use the Indian agency for pitching for conflicting accounts.

Capital was set up in 1992 by three promoters. The current shareholders in the company are HV Subramanian (47.5%), Sunil Sachdeva (47.5%) and Parshuraman Narayan (5%). It has around 50 employees and a total capitalised billings of around Rs 100-120 crore.

(Source: Economic Times )