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Hill, Holliday Agrees to Buy SF Interactive

Boston-based ad agency Hill, Holliday, Connors, Cosmopulous, an Interpublic Group company, said on Thursday that it has agreed to acquire interactive agency SF Interactive.

The companies did not disclose financial terms of the deal, which is slated to close in April, pending due diligence.

The move would expand Hill, Holliday's interactive capabilities by appending SF Interactive to the ad agency's San Francisco office, GMO/Hill, Holliday. Founded in 1997, SFI has performed online marketing, advertising and CRM work for clients including Nike, Snapple and Hewlett-Packard. The firm also has been making strides in exploring emerging media, including interactive television, wireless and broadband.

The firm's co-founder and chief executive officer, Bruce Carlisle, will become executive vice president and managing partner at GMO/Hill, Holliday, once the deal closes.

The deal also calls for SFI's Washington, D.C. office to become Hill, Holliday's third satellite office, after New York and San Francisco. Glenn Whiting, who oversaw SFI's Washington, D.C. office as general manager, becomes managing director of Hill, Holliday's D.C. office.

Hill, Holliday officials said the acquisition would allow the agency to complete its plan of transforming GMO/Hill, Holliday, from a traditional advertising agency into one that provides a fuller range of integrated marketing services.

Ironically, the move to expand Hill, Holliday's online capabilities comes as many players in the battered interactive space are desperately seeking to move their activities offline, into what could be less volatile traditional marketing. Ad network DoubleClick last year bought direct marketing and database firm Abacus Direct, while online incentive marketer CoolSavings began striking partnerships to provide offline marketing promotions for consumer packaged goods retailers.

However, the deal makes sense in that Hill, Holliday wants to begin offering clients an integrated package -- which includes online offerings. In fact, agency officials said the acquisition would allow Hill, Holliday to complete its plan of transforming GMO/Hill, Holliday, from a traditional ad agency into a full-service ad and marketing firm.

"The acquisition of SFI will allow us to service clients more effectively with a broad menu of marketing and communications offerings," said Hill, Holliday's chairman and chief executive, Jack Connors. "While most agencies are rethinking their strategies given the uncertainty of the marketplace, Hill, Holliday is moving aggressively to pursue growth and expand our integrated marketing capabilities."

Hill, Holliday will also take on current SFI clients, which include Jiffy Lube, Sallie Mae, VeriSign and Adaptec Hardware, though it is not known at press time whether any of these would pose conflict with existing Hill, Holliday clients.

"The SFI transaction helps to fulfill Hill, Holliday's commitment to creative superiority and to be the most comprehensive full service offering in San Francisco," said Laurel Rossi, who is strategic integration officer at Hill, Holliday. "SFI's digital marketing expertise in combination with Hill, Holliday's CRM, database marketing, new media and eCRM capabilities will be tough to beat."

The move likely will also toss more business in SFI's direction; Hill, Holliday services large offline brands including Fidelity Investments, Cisco Systems, Minolta and Dunkin' Donuts. The Boston-based agency also has practices including traditional advertising, direct mail, database management and data analytics.

"The logic driving this transaction is pretty simple -- Hill, Holliday's strong creative reputation and commitment to fully integrated client service is a perfect match for us," Carlisle said. "As part of GMO/Hill, Holliday, we'll be able to provide our clients the full range of customer-centered communications."