Digitas, Inc. has signed a deal to buy healthcare marketing agency Medical Broadcasting Co.
Philadelphia-based Medical Broadcasting will keep its name and run independently from Digitas Inc.’s two other marketing agencies, Digitas and Modem Media (which Digitas bought in July 2004). Medical Broadcasting’s online and relationship-marketing work compliments Digitas’ digital and direct-marketing expertise.
David Kramer and Linda Holliday, who co-founded Medical Broadcasting 20 years ago, will continue to run the agency, which keeps its 140 staffers. The shop handles direct-to-consumer media advertising, CRM, corporate Web sites and Intranets for 30 clients including Abbott Laboratories, Bristol-Myers Squibb, Eli Lilly, Glaxo SmithKline and Wyeth.
Medical Broadcasting reports 2005 revenues of $23 million to $25 million. Publicly held Digitas reports full revenue of $406 million through October 2005 (up a whopping 47% from the same period in 2004), and fee revenue of $253 million (up 40%).
Boston-based Digitas will make an initial payment of $30.4 million ($22.4 million in cash, $8 million in stock) for Medical Broadcasting; the full purchase amount is based on a three-year earn-out, through 2008. The deal is expected to close in the first quarter.
Online medical marketing is booming as consumers increasingly tap the Internet for medical information; it’s consumers’ No. 2 resource, second only to information from healthcare providers themselves.
“Online marketing is ascending to become a new leading media channel for healthcare,” said Kramer and Holliday in a statement. “Many of our clients are preparing to advance their businesses’ online strategy to address this, and we see tremendous benefit in being affiliated with the robust digital marketing capabilities found in the Digitas, Inc. family of agencies.”
“MBC’s wealth of industry expertise in both professional and patient communications is a complement to our strategy of targeting the healthcare and pharmaceuticals marketplace,” said Digitas Inc. CEO David Kenny in a statement.
Digitas’ flagship agency ranked No. 19 in the 2005 PROMO 100 with 2004 net revenues of $245 million, up 23% from 2002
Network
