• by Steve McClellan  @mp_mcclellan, November 11, 2011

Aegis Group has acquired Russian full-service media shop Ad O’Clock, the London-based media holding company has confirmed. The purchase was Aegis’ second acquisition of a Russian agency this year. Like other holding companies, Aegis has an acquisition strategy to bulk up in faster-growing ad markets around the world.

As one of the so-called BRIC markets (Brazil, Russia, India, China) Russia is considered one of the most rapidly expanding ad economies in the world. According to billings tracker RECMA, ad spending in Russia last year totaled $6.3 billion, up 17% from the previous year.

There is aggressive competition in the country for share of market by several holding company shops.

According to RECMA, the top 5 agencies in the market last year were WPP’s MEC, Aegis’ Vizeum, Publicis Groupe’s ZenithOptimedia and Starcom and Omnicom’s OMD. Each of the shops had between $500 million and $565 million in billings last year, per RECMA and they were all were within one percentage point market share of each other, between 8% and 9%.

Terms of the Ad O’Clock purchase weren’t disclosed, but Aegis did say that the firm, founded in 2008, had gross assets of a little more than $4 million. Clients include state-owned Gazprom and the Russian state pension fund, as well as international clients, including Polish pharmaceutical company Polpharma and French retailer Castorama.

Commenting on the acquisition, Aegis CEO Jerry Buhlmann stated it “strengthens our participation in the buoyant Russian market, injecting further impetus into our strategy of broadening our service offering, particularly in faster growing regions." 

In August, Aegis purchased Master Ad, an out-of-home agency based in Moscow. The companies had worked together on numerous projects over the past several years, Aegis said at the time of the purchase, and that it would become part of global network of Posterscope, the Aegis OOH agency.

Unlike the Ad O’Clock purchase, Aegis shared detailed terms about the Master Ad acquisition, which includes an upfront payment of $20 million. In addition, there is a so-called "earn-out," based on achieving certain profit targets between 2011 and 2014, so that total consideration could surpass $135 million if all targets are met.

Master Ad’s 2010 profits were more than $6.5 million while gross assets were nearly $30 million.

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