Sir Martin’s Master Coup: Cordiant for A (Relative) Song!

21 August 2003

Proof positive, were it ever required, that Sir Martin Sorrell is an Emperor among agency dealmakers, was delivered on Wednesday along with with a £75 million ($119.67m; €107.6m) cheque from Publicis Groupe.

This welcome piece of paper related to the latter's contractual purchase from WPP Group of the 25% of ZenithOptimedia it did not already own.

So for an initial outlay of just £30m (£10m in new WPP shares and £20m in cash for Cordiant’s more impatient creditors), Sir Martin has acquired the Bates Worldwide and 141 Worldwide global agency networks. In addition, yesterday's £75m contribution from Publicis reduces the total acquisition cost to £106 million.

Of course, no deal on this scale can ever be quite as simplistic as painted here – not least because WAMN has not factored in any of the extortionate fees charged by the global banking and legal fraternity.

In 2002 Cordiant was ninth in Advertising Age’s global rankings with $788.5m in worldwide revenues. Today’s billing levels are known only to WPP’s accountants – but simply for the purposes of evaluating Sir Martin’s bargain-basement buy, assume these now stand at $480m after disposals and account losses. Also assume a modest 10% margin.

Presto, $48m straight through to the bottom line! What a coup de maître!

Data sourced from: WPP Group; additional content by WARC staff