<p><img src="https://static2.businessinsider.com/image/605905fe0d155e0019ef6147-2400/George Pyne Matt Winkelmeyer:Getty Images.jpg" border="0" alt="George Pyne" data-mce-source="Matt Winkelmeyer/Getty Images"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Private equity firms are pouring money into advertising after avoiding the sector for decades.</p><p>In 2019, private equity invested an estimated <a href="https://www.ciesco.com/wp-content/uploads/2021/01/2020-Ciesco-Global-MA-Review-Final-25Jan21-Version-One-per-page.pdf">$57 billion</a> in marketing and tech companies, and the percentage of marketing, tech, and digital media deals backed by PE <a href="https://www.businessinsider.com/private-equity-will-dominate-ad-industry-ma-analysts-say-2021-2">has more than doubled</a> over the past five years, to 42%.</p><p>Lenders long shunned the ad industry because, unlike manufacturing, food, or healthcare, it has no tangible assets.</p><p>But Simon Nicholls, partner at investment bank GP Bullhound, said investors have been attracted to the ad industry as it's benefitted from the <a href="https://www.wsj.com/articles/google-facebook-and-amazon-gain-as-coronavirus-reshapes-ad-spending-11606831201">explosion in digital advertising.</a></p><p>Ad agencies used to spend around half of their revenue on talent, said Chris Sahota, CEO of M&A advisory firm Ciesco and former IPG exec. But a lot of that money has shifted to technology, especially at independent, digitally focused agencies that build their own tech to compete with larger networks.</p><p>This makes the agencies behave more like software companies, making them more attractive to PE firms. The agencies for their part are looking to PE firms to expand and deliver returns to investors, Nicholls said.</p><p>Nicholls oversaw WPP's 2015 acquisition of Essence, a digital agency that analyzes Google's programmatic ads. He said that deal paved the way for similar, PE-backed purchases.</p><p>Stephen Master, principal at PE firm GTCR, said most PE firms still don't understand the ad business.</p><p>But PE firms poured millions into M&A after an early 2020 pandemic freeze, acquiring both growing agencies and those weakened by the pandemic. Some are entering the sector for the first time, said managing director Marc Flor of investment bank Berkery, Noyes & Co. Others like CI Capital and GTCR have launched new groups dedicated to marketing.</p><p>With trillions in capital, PE firms are posing new competition for traditional ad holding companies like WPP and Omnicom for agencies and tech firms.</p><p>They're also competing against newer ad networks like S4 Capital, Stagwell Group, and You & Mr. Jones, which are seeking tech companies versus traditional ad agencies, said Jay McDonald, CEO of Digital Capital Advisors.</p><p>Insider identified 14 firms, listed in alphabetical order, based on recent deals and conversations with investment bankers, agencies, and PE execs.</p><p>Representatives for the PE firms declined to comment unless otherwise noted.</p><h3>Advent International</h3><img src="https://static6.businessinsider.com/image/6058ed5e0d155e0019ef6090-400-300/advent-international.jpg" alt="" /><p><p><strong>Assets: $66.2 billion</strong></p><p><strong>Properties: Ansira, Tag Worldwide</strong></p><p>37-year-old Advent International has played a significant role in advertising over the past four years, investing in production company Tag Worldwide and <a href="https://www.businessinsider.com/martech-healthcare-consulting-wpp-advertising-holding-company-mergers-acquisitions-2020-10#ansira-1">marketing network Ansira</a>, which helps brands target and personalize local ads.</p><p>Advent acquired a majority stake in Ansira in 2016 and funded its acquisition of properties like email agency BrightWave, targeting platform Local Biz Now, and CDK Global, which works with local auto dealers.</p><p>Ansira originally focused on traditional customer relationship management and direct mail marketing. But since being acquired, the firm has shifted focus to digital and <a href="https://www.bizjournals.com/stlouis/news/2020/08/18/ansira-partners-reorganizes-into-3-business-units.html">nearly doubled</a> its reported revenue to over $200 million.</p><p>Analysts consider Ansira to be <a href="https://www.businessinsider.com/martech-healthcare-consulting-wpp-advertising-holding-company-mergers-acquisitions-2020-10#ansira-1">a prime M&A target</a> because it's growing and nearing the end of the traditional three-to-five year investment cycle. An investor with direct knowledge said Advent recently was <a href="https://www.businessinsider.com/10-top-ad-agency-acquisition-targets-for-2021-2021-2#tag-worldwide-8">in talks to sell</a> Tag Worldwide.</p><p>An Advent representative said the firm does not comment on speculation. Tag declined to comment.</p></p><br/><br/><h3>Bain Capital</h3><img src="https://static1.businessinsider.com/image/6058e661106eb50019d04f38-400-300/bain-capital.jpg" alt="" /><p><p><strong>Assets: $120 billion</strong></p><p><strong>Properties: Kantar, Mavens, ADK</strong></p><p>Bain has made big investments in the marketing industry such as Japanese agency network ADK Holdings, which it <a href="https://www.reuters.com/article/us-asatsu-dk-m-a-wpp/wpp-accepts-bains-offer-for-japans-adk-drops-legal-threat-idUSKBN1DL095">acquired</a> from WPP in 2017.</p><p>Its largest purchase to date was 2019's $4 billion, 60% stake in market-research firm Kantar, also a former WPP property.</p><p>Bain managing director Matt Freeman said the firm wants to make Kantar's core data and analytics business "a single source of truth for the CMO."</p><p>Bain sold Kantar's <a href="https://newyork.citybizlist.com/article/644734/sale-of-kantar-health-kicks-off-bain-makeover">healthcare</a> and <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/bain-capital-sells-kantar-s-srds-to-adwanted-57866372">ad sales</a> divisions before <a href="https://www.mrweb.com/drno/news29428.htm">snapping up London consultancy Mavens</a> to expand its analytics capabilities. Ciesco's Chris Sahota, who negotiated the Mavens deal, predicted that Bain would continue adding small firms that complement Kantar.</p><p>"Previously, these types of businesses were venture-backed, but the size of the opportunity has grown such that large buyout firms are now looking hard at this space," Freeman said.</p></p><br/><br/><h3>Bruin Sports Capital</h3><img src="https://static4.businessinsider.com/image/6058e977106eb50019d04f3f-400-300/bruin-sports-capital.jpg" alt="" /><p><p><strong>Assets: <a href="https://www.nytimes.com/2019/11/05/sports/bruin-sports-george-pyne.html">$1 billion</a></strong></p><p><strong>Properties: Two Circles, TRM Partners, TGI Sport</strong></p><p>Bruin Sports Capital was established in 2015 by consulting veteran George Pyne, who had built the sports division of talent management giant IMG.</p><p>Since then, Pyne and his partners have acquired 21 sports-focused properties like ad agency Two Circles and sponsorship firm TRM Partners. Two Circles had been part of WPP, which <a href="https://www.wpp.com/news/2015/01/wpp-leads-us250-million-investment-round-in-george-pynes-bruin-sports-capital">also led</a> Bruin's initial $250 million investment round.</p><p>Partner David Abrutyn said Bruin thinks more long-term than most PE firms. It has only exited one investment — NFL events company On Location Experiences, which it sold to Endeavor — and hasn't replaced any CEOs.</p><p>"It's very personal when founders are selling their agencies, and we want to be as supportive as possible in working together," Abrutyn said.</p><p>In March, Bruin acquired outdoor ad tech company TGI Sport for <a href="https://www.nytimes.com/2021/03/22/business/dealbook/tax-loophole-wealthy.html">around $100 million.</a> Abrutyn said more deals would be coming in the months ahead.</p></p><br/><br/><h3>Carlyle Group</h3><img src="https://static2.businessinsider.com/image/6058e9eb106eb50019d04f41-400-300/carlyle-group.jpg" alt="" /><p><p><strong>Assets: $246 billion</strong></p><p><strong>Properties: Dept</strong></p><p>Carlyle, the <a href="https://www.privateequityinternational.com/database/#/pei-300">second-largest PE firm</a> by total assets, was one of the first to enter marketing in the early 2000s, buying and selling production company The Mill and agency Bigmouthmedia.</p><p>But the firm's biggest advertising investment is digital agency network Dept, which it acquired from Waterland in 2020.</p><p>"We see Dept as a leading digital agency in the European and US markets and have a clear strategy to further grow the business, both organically and through M&A," said Andrew Tan, associate director at Carlyle's tech advisory team.</p><p>Dept has been on a tear since Carlyle's investment, acquiring seven companies such as design firm Basic, software consultancy <a href="https://www.newswire.com/news/dept-expands-fast-growing-us-presence-with-software-consultancy-devetry-21342730">Devtery</a>, and London-based digital agency <a href="https://www.businessinsider.com/10-top-ad-agency-acquisition-targets-for-2021-2021-2">Byte</a>.</p><p>CEO Dimi Albers told Insider that Dept plans to buy more properties in the US and open offices in China to expand globally.</p></p><br/><br/><h3>CI Capital Partners</h3><img src="https://static5.businessinsider.com/image/605ba6cb106eb50019d05763-400-300/ci-capital-partners.jpg" alt="" /><p><p><strong>Assets: $1.3 billion</strong></p><p><strong>Properties: Hero Digital, Impact Group, PRA</strong></p><p>CI Capital Partners long focused on healthcare and logistics but has big ad industry M&A plans.</p><p>In late 2020, the firm hired former Ansira CEO Martin Reidy as a senior advisor to guide new acquisitions. Reidy, who also held top roles at MediaLink, Publicis, IPG, and Bain, <a href="https://www.prnewswire.com/news-releases/ci-capital-forms-partnership-with-martin-reidy-to-pursue-platform-company-investments-in-the-marketing-services-industry-301111236.html">said</a> CI wants to build a marketing services platform company that can work with both agencies and CMOs.</p><p>CI entered the ad industry in 2016, investing in packaged-goods specialty firm Impact Sales, digital consultancy Hero Digital, and events agency PRA. The three have made more than a dozen of their own acquisitions, including other agencies and <a href="https://markets.businessinsider.com/news/stocks/impact-group-acquires-cluep-to-bring-ai-powered-digital-services-to-grocery-industry-1027544165">an ad tech startup</a>.</p><p>CI has yet to announce any deals under Reidy.</p></p><br/><br/><h3>Clayton, Dubilier & Rice</h3><img src="https://static4.businessinsider.com/image/5fca626eb6a3a800199b6a1c-400-300/clayton-dubilier-and-rice.jpg" alt="" /><p><p><strong>Assets: $15.5 billion </strong></p><p><strong>Properties: Huntsworth</strong></p><p>With <a href="https://www.gurufocus.com/guru/clayton,+dubilier+&+rice,+llc/profile">more than $15 billion</a> in assets, 43-year-old CD&R has invested heavily in energy, construction, and healthcare companies like SmileDirectClub.</p><p>The New York firm spent more than $700 million after the pandemic to <a href="https://www.cdr-inc.com/news/press-release/cdr-acquires-healthcare-services-company-%C2%A3575-million-transaction">acquire</a> Huntsworth, a network of agencies in the UK and US that helps pharmaceutical and biotech companies plan product development, organize PR strategies and events, and market medicines to US consumers.</p><p>The company had previously been public for more than 20 years.</p><p>Since the acquisition, CD&R made its ambitions clearer by acquiring consulting firm Cormis and medical marketing agency Nucleus Global to create <a href="https://www.prnewswire.co.uk/news-releases/cd-amp-r-creates-global-medical-communications-leader-828056411.html">what it calls</a> "a leading pharma commercialization platform" under Huntsworth.</p><p>CD&R did not respond to requests for comment.</p></p><br/><br/><h3>GTCR</h3><img src="https://static4.businessinsider.com/image/605b5bb30d155e0019ef6721-400-300/gtcr.jpg" alt="" /><p><p><strong>Assets: $15 billion</strong></p><p><strong>Properties: Simpli.fi</strong></p><p>Chicago-based GTCR, with <a href="https://mergr.com/gtcr-acquires-dreamscape">$15 billion</a> in assets, entered the marketing and communications field in 2014, when it acquired PR software giant Cision, which it later took public and sold to <a href="https://www.businessinsider.com/8-private-equity-firms-investing-in-the-public-relations-industry-2020-12#platinum-equity-6">Platinum Equity</a>.</p><p>In 2017, GTCR also acquired ad targeting platform Simpli.fi, which has since grown through M&A deals like January's <a href="https://www.adweek.com/programmatic/simplifi-buys-advantage-software/">$100 million purchase</a> of software company Advantage Advertising.</p><p>Principal Stephen Master said GTCR plans to draw from a $7.5 billion fund to turn Simpli.fi into "a Trade Desk for smaller, independent ad agencies" that are often forced to outsource their media-buying work to bigger firms. Master said he sees huge opportunity for growth since there are 13,000 such agencies in the US alone.</p><p>GTCR and several former execs at ad tech company Integral Ad Science also recently <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/gtcr-to-set-up-new-marketing-technology-business-58588368">formed</a> a new company called Dreamscape; Master said they'll invest up to $600 million in market research software to build "the technologies the Kantars of the world will use."</p></p><br/><br/><h3>Innovatus Capital Partners</h3><img src="https://static4.businessinsider.com/image/605901e70d155e0019ef6133-400-300/innovatus-capital-partners.jpg" alt="" /><p><p><strong>Assets: $1.6 billion</strong></p><p><strong>Properties: VSA Partners, Public Label, Match Retail</strong></p><p>New York's Innovatus is a new player in the marketing world. Since its founding in 2015, the firm has primarily invested in life sciences, real estate, and construction.</p><p>But it quickly <a href="https://www.businessinsider.com/private-equity-innovatus-capital-buys-two-more-advertising-agencies-2021-3">snapped up three ad agencies</a> in the first three months of 2021. Founding partner David Schiff said the pandemic presented an opportunity to buy agencies that "didn't have the right capital structure or balance sheet to sustain themselves."</p><p>VSA Partners, Match Retail, and Public Label will have a "brother-sister relationship" that lets them share resources and collaborate on new business pitches that often see them going up against far larger agency networks, said Schiff.</p><p>With <a href="https://aum13f.com/firm/innovatus-capital-partners-llc">$1.6 billion</a> in assets as of 2021, Schiff said Innovatus would spend aggressively to expand its presence in the ad industry.</p></p><br/><br/><h3>Insignia Capital Group</h3><p><p><strong>Assets: <a href="https://privatefunddata.com/fund-companies/insignia-capital-group-lp/">$371 million</a></strong></p><p><strong>Properties: MediaAlpha, Market Performance Group</strong></p><p>California's Insignia Capital Group has a history in advertising owing to founder Tony Broglio's experience at Lake Capital, which <a href="http://www.lakecapital.com/investments_historical.asp#respond">acquired and sold several</a> small-to-midsize agencies and now owns holding company Engine.</p><p>Insignia bought medical marketing company MNG Health in 2015 and exited in 2019. The same year, it invested in Amazon agency Netrush and digital firm Dynamit while acquiring <a href="https://www.prnewswire.com/news-releases/mediaalpha-to-sell-significant-minority-stake-to-insignia-capital-300788741.html">a significant minority stake</a> in programmatic platform MediaAlpha at a $350 million valuation.</p><p>Berkery Noyes' Marc Flor, who has worked with Insignia, said the firm's principals told him they were happy with the returns on MediaAlpha, retaining shares and committing more capital to tech-driven marketing companies.</p><p>In February, the firm made <a href="https://www.sawayapartners.com/mpg-insignia-2/">another strategic investment</a> in retail, CPG and healthcare firm Market Performance Group, with plans to accelerate its M&A efforts.</p><p>Insignia did not respond to requests for comment.</p></p><br/><br/><h3>Mountaingate Capital</h3><img src="https://static2.businessinsider.com/image/605b3ff2106eb50019d054a7-400-300/mountaingate-capital.jpg" alt="" /><p><p><strong>Assets: $469 million</strong></p><p><strong>Properties: Bounteous, Acceleration Group, Relevate Health Group</strong></p><p>With <a href="https://reports.adviserinfo.sec.gov/reports/ADV/294899/PDF/294899.pdf">around $469 million</a> in total assets as of March 2020, Denver-based Mountaingate has been a springboard for small and growing agencies in recent years.</p><p>Mountaingate exited two of its most successful investments, healthcare-focused PR and marketing network Real Chemistry and digital agency Tinuiti, in 2019 and 2020, respectively. Both were acquired by larger New Mountain Capital after expanding through M&A.</p><p>Mountaingate is a derivative of PE predecessor KRG, whose co-founder Bruce Rogers entered the ad fray in the 2000s by investing in agencies like Olson and Ansira, which sold to ICF and Advent International.</p><p>The firm also creates its own companies, combining several agencies to form Tinuiti and <a href="https://www.businessinsider.com/10-top-ad-agency-acquisition-targets-for-2021-2021-2#bounteous-1">Bounteous</a>.</p><p>In December it merged Relevate Health Group with digital agency Arcteric and acquired a majority stake in performance agency Acceleration Partners, which quickly snapped up two properties in the <a href="https://mountaingate.com/news/acceleration-partners-and-streamline-marketing-join-forces-to-expand-partner-marketing/">US</a> and <a href="https://mountaingate.com/news/acceleration-partners-acquires-uk-based-r-o-eyes-agency-business/">UK.</a></p></p><br/><br/><h3>New Mountain Capital</h3><img src="https://static4.businessinsider.com/image/605b82c1106eb50019d05674-400-300/new-mountain-capital.jpg" alt="" /><p><p><strong>Assets: $30 billion</strong></p><p><strong>Properties: Tinuiti, Real Chemistry</strong></p><p>New Mountain, founded in 1999 by Goldman Sachs and Forstmann Little vet Steven Klinsky, primarily invests in healthcare, software, and financial services companies. It moved into marketing with a <a href="https://www.businesswire.com/news/home/20190529005623/en/W2O%C2%A0Announces-Investment-from%C2%A0New-Mountain-Capital-Partnership-Focused-on-Making%C2%A0the-World-a-Healthier-Place-through-Marketing-Communications">2019 investment</a> in healthcare-focused Real Chemistry, formerly W2O Group.</p><p>The following year, New Mountain announced <a href="https://www.wsj.com/articles/private-equity-firm-new-mountain-capital-raises-over-10-billion-for-deals-11610580565">$10 billion in new funds</a> and bet big on performance marketing, one of advertising's hottest growth areas, with a majority stake in Tinuiti.</p><p>Real Chemistry has been on an acquisition spree, reporting $350 million in revenue last year while many networks struggled. It bought healthcare agency 21Grams, payment firm Discern Health, influencer agency Starpower, and, in January, medical tech companies Swoop and IPM.ai.</p><p>Tiniuiti also put its own M&A strategy into action soon after the New Mountain deal by <a href="https://www.wsj.com/articles/tinuiti-acquires-amazon-specialist-ortega-group-adds-kevin-mayer-to-board-11615996800">acquiring Amazon specialty firm Ortega Group</a> and adding former TikTok CEO Kevin Mayer to its board.</p></p><br/><br/><h3>Permira</h3><img src="https://static1.businessinsider.com/image/605cd7276746fb0018a73c02-400-300/permira.jpg" alt="" /><p><p><strong>Assets: $50 billion</strong></p><p><strong>Properties: Seismic</strong></p><p>UK giant Permira has invested in a wide range of companies over the past 35 years, from Doc Martens to Ancestry.com.</p><p>It recently moved into advertising, with its acquisition and sale of e-commerce company Magento and, more recently, its role leading <a href="https://www.prnewswire.com/news-releases/seismic-raises-92m-in-series-f-funding-led-by-the-permira-funds-valuing-company-at-1-6b-301139929.html">$92 million in Series F fundraising</a> for marketing platform Seismic at a $1.6 billion valuation.</p><p>Seismic counts IBM and Amex among its clients and ties content marketing to sales.</p><p>Permira said it would help Seismic significantly increase its M&A activity. Seismic in the past acquired B2B rival Percolate, and since the Series F round, bought digital and social sales platform Grapevine6.</p><p>Permira and Seismic did not respond to a request for comment.</p></p><br/><br/><h3>Shamrock Capital</h3><img src="https://static4.businessinsider.com/image/6058e4860d155e0019ef6070-400-300/shamrock-capital.jpg" alt="" /><p><p><strong>Assets: $3.5 billion</strong></p><p><strong>Properties: Adweek, Wpromote, Excel Sports Marketing</strong></p><p>Los Angeles-based Shamrock Capital was another early entrant in the marketing sector, buying companies like ad agency Media Storm in the late 2000s.</p><p>Partner Laura Held said Shamrock sees opportunities in areas like convergent TV, customer loyalty software, e-commerce, and media companies.</p><p>The firm's highest-profile acquisition has been trade publication Adweek, which it bought from Beringer Capital in mid-2020.</p><p>It's also acquired performance marketing agency <a href="https://www.businessinsider.com/12-e-commerce-companies-that-are-hot-acquisition-targets-2021-2021-1#wpromote-12">Wpromote,</a> audio company Ad Results Media, and talent agency Excel Sports Marketing, whose clients have included Tiger Woods and Derek Jeter. In January, the firm acquired Bayard Advertising, an agency that creates recruitment campaigns and has clients including Expedia and Hanes.</p></p><br/><br/><h3>Vista Equity Partners</h3><img src="https://static5.businessinsider.com/image/5f8a2532d260780019341fdd-400-300/vista-equity-partners.jpg" alt="" /><p><p><strong>Assets: $73 billion</strong></p><p><strong>Properties: Integral Ad Science, Mediaocean, Numerator, TripleLift</strong></p><p>Austin's Vista Equity Partners, one of the <a href="https://www.privateequityinternational.com/database/#/pei-300">top 10 global PE firms</a>, made a big splash in 2015 by acquiring a majority stake in ad-buying software company Mediaocean, then valued at $720 million.</p><p>Vista followed by picking up market research firm Numerator and ad tech company Integral Ad Science in 2017 and 2018.</p><p>Since then, each has made its own acquisitions, with Mediaocean buying several companies in 2020 and IAS picking up Amino Payments in January.</p><p>Vista reportedly <a href="https://www.wsj.com/articles/vista-equity-partners-explores-sale-of-mediaocean-1540409567">tried to sell</a> Mediaocean in 2018 and <a href="https://www.pehub.com/vista-equity-preps-sale-of-mediaocean-targeting-more-than-1-4bn-value/">in 2020</a>. Mediaocean has been described <a href="https://www.businessinsider.com/adtech-ipo-candidates-2021-2020-12#mediaocean-3">as an IPO candidate</a>.</p><p>In late March, Vista expanded in adtech by acquiring a majority stake in TripleLift, which connects brands with publishers, for an estimated <a href="https://www.adweek.com/media/triplelift-to-sell-majority-stake-to-vista-equity-partners-for-1-4-billion/">$1.4 billion</a>.</p><p>Tom Newman and Michael Kelly of advisory firm KNV, who arranged the sale of software company ColSpace to Mediaocean, predicted that Vista would continue investing in marketing services.</p></p><br/><br/>
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