The group, which pulled in £100m of revenues in 2013, will announce that 100 per cent of its shares have been bought by Lake Capital, for just under £100m. Lake effectively buys out its present private equity backer HIG. Staff are expected to retain about 15 per cent of the total shares.
The new owners will form a broader Engine Group with global ambition, and be expected to stump up the investment millions to expand an ‘independent’ full-service marketing group around the world.
The London-based group currently owns 13 marketing services agencies, ranging from flagship ad agency WCRS to the digital shop Jam and direct marketing specialist Partners Andrews Aldridge.
The group was set up nearly a decade ago with a vision to eventually rival holding groups such as WPP, Omnicom and Havas. Back in 2010, when private equity firm HIG promised a £62.5m investment, group CEO Peter Scott said he intended to grow revenues to $1bn within five years.
Growth on this scale has so far failed to materialise, however. Critics say that Engine’s portfolio of agencies, although respected, are not yet in the ‘top five in their specialisms’, which mitigates against pulling in massively lucrative accounts from multinational corporations.
Earnings before interest, tax, depreciation and amortisation (EBITDA) in 2013 were just over £13m.
According to Campaign’s Top 100 UK advertising agencies-by-billings table for 2013, WCRS sat in seventh place with billings of £210m.
Earlier this year one of the group’s longest-standing clients, BMW, placed its business elsewhere.
Engine’s current management, including Scott and UK CEO Debbie Klein, were known to be keen to replace HIG with a new investor that would fund expansion around the world.