M+C Saatchi and advertising agency MBO halt management buyout

In July, Mediaweek reported on M+C Saatchi Group Australia’s proposed management buy-out.

Today it has been announced that M+C Saatchi’s the management buyout will not proceed. 

The official statement reads: 

"M+C SAATCHI AUSTRALIA AND NEW ZEALAND ADVERTISING AGENCY MBO NO LONGER PROCEEDING.

"M+C Saatchi Group today announces that, following an extensive review of strategic options for its Australia and New Zealand advertising agency, the previously announced management buyout of the business, backed by private equity, will not proceed.

"Following constructive discussions, it was ultimately determined that a transaction could not be concluded on terms acceptable to all stakeholders.

"In light of the decision not to pursue the management buyout, M+C Saatchi Australia and New Zealand is in discussions with clients regarding ongoing work and where appropriate, the option to transition work to another part of the wider M+C Saatchi group.

“This decision relates specifically to the Australia and New Zealand advertising agency business that was the subject of the proposed transaction and does not impact M+C Saatchi World Services, the government services and behaviour change agency, which will continue to operate in Australia and remains unaffected.”

“It's devastating…heartbreaking”

An industry source close to the team has told Mediaweek:

"It’s devastating. The exec team gave it all they had to try and make the buyout happen. 

"They put their time, energy and reputations behind a plan that they genuinely believed could give this business another chapter under independent, local ownership.

"They saw a real opportunity to save a 30-year-old advertising institution, to protect the people, the culture, the clients, and the legacy built over three decades. They came incredibly close, but ultimately for some reason the deal couldn’t get done.

"For the team, it’s heartbreaking. But it’s also a sad moment for the industry. M+C is a company that has been part of the ANZ market for 30 years, it’s the loss of a huge amount of talent, some of the market’s best work and a significant piece of the industry’s history.

"Being close to this situation and the people involved, I think it’s important to remember that many in the current exec team have only been in their roles for a year, or less, having inherited an already exceptionally challenging business when they stepped in. 

"They did everything they could to turn it around, protect their people and continue delivering for clients.

"Dani Bassil, in particular, has shown extraordinary leadership, showing up every day for her people and clients through very difficult circumstances, while also weathering some brutal media coverage.

"What I have been most impressed by is her resilience and strength, despite the emotional toll. Dani has led with determination, authenticity and transparency when it would have been easy to step away or give up.

“This current management team deserves enormous credit. They didn’t walk away, they kept showing up and trying everything they could for the business right to the end.”

Statement from Parc re M+C deal

“Following a period of due diligence, the proposed management buyout of M+C Saatchi Group Australia and New Zealand, which was to be backed by growth investment firm, Parc, will not proceed.”

Adam Pozniak, co-founder of Parc, said: “While we are disappointed the proposed transaction will not proceed, we respect the outcome of the due diligence process.

“Parc remains committed to identifying and supporting independent, entrepreneur-led agency businesses in Australia and New Zealand. We will continue to explore investment opportunities aligned with our vision of building a modern, independent business across the region that meets marketers' needs today and into the future.”

“Parc will not be commenting further on the proposed M+C Saatchi Group transaction.”