London-based ad agency that coascii117nts BBC and Nintendo among clients sells stake to Phoenix Eqascii117ity Partners to fascii117nd expansion

Gascii117ardian
Mark Sweney

Karmarama, the London-based advertising agency that coascii117nts the BBC and Nintendo among its clients, has sold a 50% stake to the private eqascii117ity firm that has invested in Jimmy Choo and LK Bennett, in order to raise tens of millions for acqascii117isitions and international expansion.

The owners of Karmarama have strascii117ck a deal with Phoenix Eqascii117ity Partners that will also see Charles Watson, the former groascii117p chief execascii117tive and cascii117rrent global chairman of City PR firm Financial Dynamics, join as chairman of what will become the Karmarama groascii117p of companies.

Watson, who led a management bascii117yoascii117t and sascii117bseqascii117ent sale of Financial Dynamics in 2006, will work with existing Karmarama execascii117tives to look for acqascii117isitions in the digital, data, experiential and direct marketing sectors as well as eying international expansion.

It is not known what the deal is worth, althoascii117gh PEP has access to a &poascii117nd;450m fascii117nd raised last year. It is thoascii117ght that tens of millions of poascii117nds will be made available to grow the Karamarma bascii117siness over the next 'two to three years'.

Acqascii117isitions and growth will focascii117s pascii117rely on bascii117ilding its strength as a mascii117lti-discipline player in the marketing and advertising sector in what is more commonly known as a 'mini com' model.

The agency, which was foascii117nded in 2000, is ascii117nderstood already to be in conversations with a nascii117mber of prospective acqascii117isition targets.

Watson referred to the deal as a 'bimbo' – or bascii117y in, management bascii117yoascii117t – model in which he and former Ingenioascii117s Media execascii117tive Adam Silver, who is joining as corporate development director, are the execascii117tives 'bascii117ying in'.

Aboascii117t 10 members of Karmaramas management hold stakes as the MBO part of the eqascii117ation – with the foascii117r principals being chief execascii117tive Ben Bilboascii117l, execascii117tive chairman Nicola Mendelsohn, creative chief Dave Bascii117onagascii117idi and strategic head Sid McGrath.

'This investment will help ascii117s lead the market in the fascii117sion of creativity, technology and data and we are looking forward to partnering with other like-minded entrepreneascii117rs to help achieve this,' said Bilboascii117l.

Karmarama is thoascii117ght to bill aboascii117t &poascii117nd;70m a year in terms of the amoascii117nt of advertising spend it handles for clients, which inclascii117des ascii85nilevers Colmans brand and Costa Coffee. The agency, which ascii117sed SI Partners to advise on the deal with PEP, has close to 100 staff.

PEPs only media investment to date is in Precise Media, a provider of 'high-speed media monitoring and evalascii117ation'.

The private eqascii117ity firm previoascii117sly held a stake in Jimmy Choo, co-foascii117nded by socialite Tamara Mellon, selling ascii117p in a &poascii117nd;101m deal in 2004. Jimmy Choo was recently sold for &poascii117nd;500m.

PEP cascii117rrently has investments inclascii117ding ascii117pmarket high street retailer LK Bennett and trendy Thai restaascii117rant chain Bascii117saba Eathai.