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Singo goes large in mergerFleur Leyden

February 08, 2007 12:00am
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JOHN Singleton's STW Group will merge two of its 13 advertising agencies to create one of Melbourne's biggest advertising outfits.

In a move that will challenge the likes of George Patterson Y&R and Clemenger BBDO in Melbourne, STW's biggest company, Singleton Ogilvy & Mather will join forces with Badjar.

"It will be a pretty big operation," said STW executive chairman Russell Tate.

He said it made sense to join two companies that were doing well despite Australia's "toughest advertising market".

"Less and less money is being chased by not many less agencies," he said.

The merged entity, to be re-named Badjar Ogilvy, will be 67 per cent owned by STW and 33 per cent by Ogilvy & Mather Worldwide.

The Melbourne operations of other STW companies, including Ogilvy One and Ogilvy Interactive, will move to the same premises as the new company.

Badjar's founding shareholders Don Jeffery and Rod Bennett and S&OM managing director Luke Waldren will run the new firm, which will have combined revenues of about $30 million a year and about 145 staff.

SO&M, which lost several key clients in 2004, kept Myer as a client despite a review of the retailer's suppliers when it was bought last year by private equity interests.

It also does work for insurance company AAMI, Australia Post and Crown Casino.

Badjar's clients include Foster's Group, McCains and BMW.

STW owns almost 60 marketing services companies.

The company, which reports full-year results on February 27, booked a 22 per cent lift in revenue to $176.1 million in 2005, while earnings before interest, tax, depreciation and amortisation were up 17 per cent to $52.6 million.

STW shares closed 4 weaker yesterday at $3.20.

Overseeing merger: STW CEO Mike Connaghan and chairman Russell Tate. Picture: Andrew Henshaw