French group Fimalac is investing in digital services agency Jellyfish in the largest marketing services transaction in Europe this year. The investment, which will value the expanded business at £500m, will result in Fimalac owning a majority stake in Jellyfish and will also see Fimalac’s data-driven marketing outfit, Tradelab, become part of the agency.
“Building a digital business that is fit for the 21st century means adding technology, consultancy and training to agency services and, on top of this, delivering them at scale” according to Jellyfish CEO Rob Pierre, and this is exactly what he hopes the agency will be able to achieve thanks to the addition of Tradelab’s capabilities to the business and the expansion opportunities the investment will afford them.
For Fimalac, a holding company with a diversified range of interests, the deal represents a strategic investment in an industry being transformed by technology and data, and owner, Marc Ladreit de Lacharrière, is said to be looking to put together a group to become a key player in the sector. It is yet another example of a private-equity backed deal; something that is becoming somewhat of a trend (this year has also seen WPP's sale of 60% of Kantar to Bain and investments by Phoenix in 1000heads, Livingbridge in brainlabs and LDC in MSQ). It will be interesting to see if Fimalac becomes a serial marketing services acquirer and a mainstream competitor to the likes of S4, Accenture and the holding companies.
Until now, Jellyfish has been one of the world’s largest independent digital agencies and becoming a majority-owned subsidiary and absorbing another business will undoubtedly represent a cultural change. Jellyfish has enjoyed successful organic growth since its 2005 inception, but it seems that it is still difficult to reach a certain scale in the industry without joining a network or seeking private-equity backing.
Jellyfish is taking investment from France’s Fimalac group in a deal that increases the size of the UK digital agency by more than a third to 1,100 people and puts a £500m valuation on the expanded business.