Saatchi & Saatchi plc in London said it has agreed to sell Siegel & Gale Inc. in New York City to a
newly formed company owned by third party investors and the management of
Siegel & Gale for $33.8 million.
Siegel & Gale is a strategic marketing and communications business
specializing in corporate and brand identity, document simplification and
interactive media.
In 1997 Siegel & Gale recorded profit before interest and tax of $3.3 million,
Saatchi said. The net liabilities of Siegel & Gale as of Dec. 31 were $6.0
million. Siegel & Gale said its revenues are in excess of $30 million and the
company Siegel & Gale employs 275 people in the U.S. and abroad.
Bob Seelert, chief executive officer of Saatchi & Saatchi, said: “Siegel &
Gale’s operations are not part of our core business, which is delivering
highly creative ideas to our global client base. We are pleased to have
realized our investment and wish Alan Siegel and his team every success.”
Saatchi acquired the company in 1985.
Founded in 1969, Siegel & Gale helps companies establish strong brands and
corporate identities and was a pioneer in simplified communications, a
discipline the company originated to simplify complex legal and business
documents. The company has also moved rapidly to apply this expertise to new
interactive communication technologies.
Clients include a number of blue chips, including IBM, Kodak, and American
Express.
Vestar Capital Partners, a New York-based private investment firm that
specializes in management buyouts, has agreed to provide equity to finance the
buyout along with the new management owners.
“After 13 successful years as part of the Saatchi & Saatchi group of
companies, now is the right time for Siegel & Gale to become independent
again,” said Alan Siegel, founder and chief executive of Siegel & Gale.
“Independence will give us the flexibility and speed to respond aggressively
to new market opportunities domestically and abroad.”
Siegel & Gale said it intends to expand its capabilities by acquiring U.S.
companies that are innovators in interactive media and those in Europe and
Asia that complement its existing business.
“The verbal, visual and behavioral aspects of branding grow ever more critical
to marketing on the Web and other forms of corporate communication,” Siegel
said. “The management buyback will enable us to enhance our singular strengths
in these areas and to expand the global reach of our core business,” he added.
Scott Lerman, managing director of Siegel & Gale who joined the company in
1982, will become president upon completion of the buyout. Lerman succeeds
Kenneth Morris, who will be leaving the firm to become chairman and CEO of
Lightbulb Press.
