DDFH&B buys McConnell's assets

DDFH&B CONFIRMED yesterday that it would buy the “assets and goodwill” of fellow advertising agency McConnells.

A receiver is expected to be appointed to the remainder of the McConnells business, which was owned by AFA O’Meara.

The acquisition, which was being finalised yesterday, will see McConnells being run as a going concern, with all the agency’s 80 staff to remain with the enlarged business on an initial basis.

It was unclear last night what purchase price was involved, but it is believed to include a performance-related element.

McConnells staff learned of the deal by e-mail yesterday.

Sources said McConnells carries substantial debts, but these are not expected to transfer to DDFHB but, rather, to be addressed by a receiver.

Jim Donnelly, chief executive of DDFH&B, confirmed in a statement yesterday that a deal had been concluded with McConnells that would see the agency being run as a going concern.

The new ownership “will place the business on a secure financial footing”, the statement said.

Mr Donnelly’s brother Pat Donnelly, an experienced advertising executive, will become chief executive of McConnells and will “shortly” announce a new management team.

Pat Donnelly joined McConnells in February as head of media.

“We are determined that the McConnells brand itself should continue to be prominent in Irish advertising,” Pat Donnelly said.

Jim Donnelly is the largest shareholder in DDFH&B with 70 per cent, with the remainder controlled by WPP-owned JWT. DDFH&B’s statement indicated that McConnells would use WPP’s GroupM for media buying.

McConnells was acquired by AFA O’Meara two years ago in a transaction estimated at €15 million. The timing of the deal, led by Stuart Fogarty, was not fortuitous and the merged entity ran into difficulties, losing Tesco and Danone accounts.The most recent accounts for McConnells show sales just shy of €36 million in 2008, down from €40 million a year earlier. Profits were €1.3 million, dropping from €4.8 million.