London-based digital marketing agency LBi has bought US social media marketing agency Mr Youth for approximately $40- $50m.
The deal will see LBi boost its existing social media offerings, including word-of-mouth, student marketing and consumer participation generation tools.
Founded in 2002 by Matt Britton, New York-based Mr Youth helps brands run social media campaigns, and its clients have Coca-Cola, Procter & Gamble and Microsoft. LBi’s clients include Johnson & Johnson, Bristol-Myers Squibb and Sony Ericsson.
Over the years, Mr Youth saw rapid expansion of its business and has consistently grown greater than 20 per cent year on year over the past three years, with 2011 annual sales expected to come in at approximately $25 million.
The agency was recently ranked 7th among Fast Company’s “Most Innovative Companies in Advertising and Marketing” in the world.
Mr Youth will receive $30 million for the acquisition but can earn up to $50 million depending on the company’s earnings before interest, taxes, depreciation and amortization over the next few years.
Mr Youth has 140 full-time employees and expects net sales of approximately $25 million in 2011 and no layoffs will come as a result of the acquisition.
Matt Britton will remain CEO of Mr Youth and will report directly to Taylor.
Luke Taylor, CEO of LBi said: “Globally, we are seeing revolutionary change in consumer buying behaviour. Our clients are therefore driving rapid growth of social media services within LBi, and the US leads the world market in this field. We believe Mr Youth is head and shoulders above its competitors due to both the quality of it people and the strength of its proprietary technology platforms. After conducting a thorough search for the right agency, we are very pleased to welcome Matt and his incredible team to LBi.”
LBi will incorporate Mr Youth’s proprietary technology platforms and distribution channels into their own intellectual property deployed across their top client relationships.
The proprietary platforms Mr Youth bring to this deal include RepNation (www.repnation.com), a word of mouth marketing platform supported by over 125,000 influential brand advocate members, and CollegeFest (www.collegefest.com), the nation’s largest back to school festival and localized student marketing platform, an on-demand consumer participation platform that was spun-off as a standalone entity in August 2011.
“It was clear the moment we met with LBi that there was the potential to do something big. Their global footprint, creative excellence, and technical proficiency will be a powerful mix when combined with our intellectual property, social media marketing model, and deep domain expertise in marketing to millennials. We are incredibly excited about our future together,” said Matt Britton, CEO of Mr Youth.
www.LBi.com
