International advertising agency M&C Saatchi has made its first move into brand acquisition with the launch of Saatchinvest, an investment fund that will seek to acquire established ‘under-utilised’ brands from divesting multinational companies.
Saatchinvest has signed up former Alchemy investment executive Andrew Lee as the fund’s managing director. The first deal completed is a joint venture with Heinz, which sees the fund acquiring the food giant’s Complan and Casilan brands. According to Leek, these brands are a perfect fit with Saatchinvest’s strategy, given their established, but under-utilised, status.
The firm has not disclosed the amount paid for the two brands, with Leek only confirming that it was ‘neither big nor small’. Management of the two brands have participated in the venture alongside Saatchinvest taking a 15 per cent stake. Heinz has retained a 34 per cent stake.
Leek, who was introduced to Saatchi’s directors by Alchemy chief Jon Moulton, said the fund, which is being funded by M&C Saatchi’s five directors, did not have a specified amount of capital to deploy but that the disciplines of private equity investing still prevailed. “The role at Saatchinvest requires the same skill-set necessary for private equity investment in that we will be seeking out opportunities where we can apply the firm’s sectoral expertise in order to grow the respective businesses.”
The fund is targeting brands with a UK presence, although the remit extends beyond solely UK and European companies. “We will be looking to make two or three investments a year, focusing on brands that are no longer considered core by multinationals looking to focus on a smaller number of higher profile core brands.” He added that brands under consideration ranged from sportswear and fashion to alcoholic beverages and beyond.
The firm will look to revitalise the branding of acquired businesses, employing Saatchi’s experience to achieve ‘top-line sales growth’. Complan is the UK market leader in the non-slimming nutritional meal replacement market and has significant market share in Africa, India, and the Americas. Casilan is one of the leading muscle building protein supplements for body builders and athletes, with significant market share in the UK. According to Leek, an extensive review of the profile of the two acquired brands is already well under way.