NEW YORK: MDC Partners chief Miles Nadal said Wednesday that a major reason his holding company bought a majority stake in Hunter Public Relations was the reputation it had built among consumer brands, as well as other firms within the MDC network.
He noted that Hunter had made a name for itself among brands particularly in the food and beauty spaces, as well as ad agencies within MDC such as Doner.
"Doner works with them on Smithfield Foods, so we had heard wonderful things about [Hunter]," said Nadal. "[The agency has] an iconic reputation as thought leaders and being very creative, and it has extraordinary retention of client relationships and a very progressive approach to the evolving communications world."
He added that the chemistry between the MDC team and Hunter’s management "was outstanding."
MDC announced on Wednesday that it had taken a majority share of Hunter, adding the agency to its stable of communications firms, which includes Allison+Partners, HL Group, Kwittken, and Sloane & Company.
Nadal said the holding company will work with Hunter to accelerate its growth in organic and new business and geographical expansion. He said the plan is similar to what MDC did for Allison, which it acquired a majority share of in 2010.
"[Allison+Partners] has grown the business almost five-fold over the last four or five years," Nadal explained. In 2013, Allison achieved US revenue growth of 21.8%, year-over-year.
He also did not rule out pairing Hunter with a sister MDC ad agency in the coming years. Kwittken, which also sold a majority share to MDC in 2010, has increasingly partnered with sister ad agency KBS+ on accounts and projects.
Nadal said the idea of teaming Hunter with an MDC ad agency is "not something we have actually identified," but the company would be receptive to and supportive of a potential partnership.
"PR is obviously a very interesting space for us," he said. "We think there is a really dynamic changing environment where the smartest, most innovative firms are the more independent, entrepreneurial firms."
In terms of the details of the deal, MDC generally buys between 51% and 80% of agencies, said Nadal. While he did not provide a specific number, it was closer to 51% in the case of Hunter.
In May, Nadal sold 40% of his stake in the holding company, or about 3.5 million shares. Yet he added that this does not indicate he is getting out of the marketing services holding company business, adding that prior to that transaction, he had not sold anything in 16 years.
"I still have a couple hundred million dollars of ownership left in the company, so I still have a material invested interest in the success of the business," he noted. "[Selling the shares] was just for estate purposes."