Situation

A $4 million traditional PR firm located in the Midwest, doing high-caliber work with a strong senior staff, turning in decent profits year after year, and enjoying a strong reputation in its market. While the firm has been highly successful, its growth has tapered off somewhat, and the owner and management team have become concerned about increasing competition in the market—particularly by the emergence and aggressiveness of local digital agencies. They believed an acquisition could help them spur their growth and add needed capabilities, but had never done a deal before.

The TobinLeff Solution

After assessing their situation and interviewing all the top managers, we concluded that the agency was not ready for an acquisition, and that the firm first needed to rethink its own vision, value proposition, and strategic direction, perform a candid SWOT analysis, get a better grasp of the competition, and have a better understanding of the various “sizes and shapes” of the myriad types of digital agencies out there today—from Web development, to SEO and SEM, to analytics, affiliate marketing, etc.—so that it could develop an acquisition strategy that was properly aligned with the overall strategic goals of the agency. We proposed and facilitated a 2-day strategic planning session, which, among other things, resulted in a profile of an ideal acquisition target. With this in hand, we helped the agency acquire a digital shop with design capabilities, and we are currently offering consultation on phantom stock plans.