NEW YORK: Kwittken & Company agreed to be acquired by MDC subsidiary Kirshenbaum Bond Senecal & Partners so it could invest in a rapidly approaching converged and integrated agency future.
A partnership between MDC and Kwittken has been in the pipeline for years, according to Aaron Kwittken, who started the firm in 2005 with Jason Schlossberg. He said he has a "profound and deep respect" for Miles Nadal, MDC chairman and CEO, and had always told Nadal he would come to him when he needed more resources.
That time had come, as Kwittken felt the firm needed a stronger digital and social media background and MDC has invested heavily in digital.
“Traditional PR agencies have five to 10 years left in the cycle before they get phased out. Everything is blurring together and traditional PR agencies need to think how they are going to add to their social and digital abilities and how to expand into other areas,” Kwittken said.
Nadal said that he sees a huge opportunity for entrepreneurial firms in PR right now.
"I've believed for the last two years that the most prolific changes in marketing are happening in the PR space," Nadal said. "If we could we would partner with every single brilliant PR firm in the world. The limiting factor is identifying them and convincing them they will have a greater success with us than as a standalone company."
Kirshenbaum acquired a majority interest in Kwittken, The New York Times announced last night. The Times reported that the acquisition cost an estimated $10 million to $15 million, although Kwittken only reported revenue of $3 million in PRWeek's 2010 Agency Business Report.
The Times article incorrectly stated that Kwittken's annual revenue is approaching $10 million. But Kwittken explained the firm had achieved a 25% increase in revenue over last year and that the $10 million figure quoted includes that increase plus the revenue of Lime PR & Promotion, another Kirshenbaum company that Kwittken will work closely with. Lime specializes in experiential, buzz, promotions, contests, events, consumer PR, and partnership programs for consumer brands.
Nadal said that the company does not comment on numbers. He did say that MDC will continue to look for more firms to partner with over the next year or two.
"I don't believe in setting arbitrary deadlines. When we find brilliant people to add to our team and we can capitalize on it we will whether it is six in six months or six in six years," he said.