Accenture among 3 finalists bidding to acquire MDC Partners, Adweek reports

Dive Brief:

Accenture is among three finalists bidding to acquire the embattled agency network MDC Partners, Adweek reported Wednesday, citing a source with direct knowledge of the matter. The deadline for bids was late November, the source said.
MDC, which is more than $1 billion in debt, per Adweek, owns over 50 agencies globally, including 72andSunny and Crispin Porter + Bogusky. The Wall Street Journal first reported news of MDC exploring a sale in September. LionTree Advisors, previously reported to be helping to lead the acquisition hunt, is being assisted by JP Morgan Chase, a source told Adweek. MDC and JP Morgan Chase declined to comment to Adweek; an Accenture representative said the company does not comment or speculate on industry rumors.
A source close to MDC told Adweek that the bid would probably be for the entirety of MDC as opposed to individual parts, though the agency network would likely be trimmed down and streamlined as part of the process. Several MDC-owned agencies, such as 72andSunny and Doner, have recently tried to buy themselves back from the company but were reportedly turned down by its board of directors. MDC has struggled amid a tough market for growth and client cutbacks and has lost a majority of its stock value this year, per Adweek. CEO Scott Kauffman stepped down abruptly in September.

Dive Insight:

Accenture has been on a steady string of snapping up agencies as Accenture Interactive, its digital marketing services division, has become a larger driver of growth. Those buys, however, have often been for smaller, independent shops to date. Acquiring an entire agency network like MDC would mark a significant ramp-up in Accenture's M&A strategy and would make the global management consultancy a considerably larger competitive threat to traditional ad holding groups than it already is. Adweek's source with close connections to MDC named Accenture the "best bidder" among the trio rumored to be currently vying for the group, noting it has existing synergies with the network and handles cost-cutting well.

While MDC isn't as sprawling as peers like WPP, Publicis, IPG and Omnicom, it has performed especially poorly of late and has been shaken by its loss of leadership. But MDC also retains heavy hitters like 72andSunny, which the NFL named its new creative agency of record on Wednesday, per Campaign. Crispin Porter + Bogusky also recently saw the return of hotshot creative executive and co-founder Alex Bogusky, who'd taken an eight-year hiatus from the ad business.

Legacy ad holding groups are viewed as wielding an advantage over consultancies when it comes to traditional creative and branding duties. Accenture potentially nabbing MDC agencies like 72andSunny and CP+B would let the consultancy better tap into those marketing specialties and a larger client network, which the company could layer into existing service areas where it has greater strength, like data and technology. Data and technology are at the same time in higher demand by clients, and older guard Madison Avenue players have quickly accelerated their focus on them, more frequently mirroring the consultancy model.

Other recent acquisitions have underpinned Accenture's growing efforts to build out its creative toolkit. In early November, it announced plans to buy the digital-first Kolle Rebbe, a German creative agency that has clients like Netflix and Audi. Just a few weeks earlier, it purchased the Brazilian content marketing shop New Content.