“Globes” has learned that the Gitam-BBDO advertising agency recently sold its 45% holding in Gitam-BBDO South Africa to US agency Young & Rubicam. The final terms of the sale will be revealed upon the publication of Gitam-BBDO South Africa’s financial results for 2000, and is estimated at $12-18 million, of which Gitam-BBDO’s share will be $6-9 million, most of which will be a capital gain.
Following the sale, Gitam-BBDO South Africa was merged with Young & Rubicam’s South African affiliate earlier this month. The amalgamated agency, called Young & Rubicam-Gitam, is one of South Africa’s four largest advertising agencies.
Young & Rubicam’s press release states that combined turnover from commissions for the two agencies last year (pro forma results) was $13.5 million, and the agencies had $81 million in accounts, of which Gitam-BBDO South Africa’s share was 70%.
Gitam-BBDO South Africa was founded in the mid-1990s by Gitam-BBDO, Kardan Investments, and a local company that runs South Africa’s lottery. The agency was founded by Gitam-BBDO chairman Moshe Theumim and CEO Mody Kidon. Gitam-BBDO later appointed Yossi Schwartz as Gitam-BBDO South Africa CEO, and received 10% of the agency’s shares. Schwartz is expected to continue running the consolidated company.
Prior to the sale of Gitam-BBDO South Africa, Schwartz and other executives bought out the local partner’s 45% stake at a significantly lower price than Young & Rubicam will pay.
Published by Israel's Business Arena on 21 May 2001