NEW YORK: London-based Hotwire PR has bought technology specialist shop Eastwick Communications in an effort to grow its presence in the U.S. and boost its position as a technology shop in North America.
The deal will increase Hotwire’s size in terms of revenue by about 40%, said Hotwire global CEO Brendon Craigie. He contended it also makes his agency an attractive alternative to large multinational networks.
"[Eastwick CEO Barbara Bates] and I spoke earlier this year, and we had a sense that the traditional multinational agency is broken. We had a real openness to combine forces in such a way to offer a true alternative to the multinational agency model," he said. "We see our real strength in having our service ethos and deep connections that come with a local agency while being able to align it with the resources we both bring to bear."
Hotwire’s 2015 revenue was nearly $23 million, down 9% from the previous year. Eastwick achieved $11.2 million in revenue in 2015, up 17% compared with the year prior.
The investment for the acquisition came from Hotwire parent Enero Group; financial terms of the deal were not disclosed.
The combination will grow Hotwire’s U.S. headcount to 70, with 42 staffers in San Francisco and 28 in New York. Bates will take on the role of CEO of North America within Hotwire, reporting to Craigie, while Heather Kernahan will serve as president. All members of the leadership teams of Hotwire and Eastwick will remain in place, the firm said.
The agencies noted that while the deal will allow Hotwire to boost its presence as a technology firm in North America, it will also give Eastwick clients agency reach into the EMEA and APAC markets. The firms, which have both launched brand labs over the years, have also partnered for more than a decade. Bates said there was a "small" client conflict, but declined to identify the company.
Bates noted that she could have sold her firm several times since founding it in 1991, and declined offers from large, global shops, noting she "spent her career fighting that model."
"[Hotwire and Eastwick] share a lot of the same values; I probably could have done this 10 times over the past five years and most of the options were big multinationals that wanted to secure a position of strength in Silicon Valley," she said.
Earlier this month, Hotwire entered the Latin American market through a strategic partnership with Sao Paulo-based integrated firm Vianews. It also launched a global health tech practice in June. Enero Group said Hotwire and consumer specialist shop Frank PR "continue to trade well with above-average margin achievement" in its first half earnings report.