Marketing Services Group Inc. (MSGI), New York, bought The Grizzard Communications Group, Atlanta, in a half-cash, half-equity $100 million deal. Founded in 1919, Grizzard’s client base includes The Salvation Army and The American Red Cross, among other nonprofit organizations. In addition, it serves such clients as MBNA America Bank N.A.
Grizzard is a family-owned business, whose founder, the ninetysomething Claude T. Grizzard Jr., still serves on the board of directors. The agency also employs three more generations of Grizzards. A specialist in nonprofit clients, Grizzard has annual gross capitalized billings of almost $200 million.
The acquisition was just one of MSGI’s summer actions that moved the company up in the ranks of nationally rated agencies. It complements MSGI’s database marketing services and increases its Internet marketing capabilities.
MSGI has two business divisions: an Internet group and a marketing services group. The Internet unit provides Net marketing, e-commerce applications, Web hosting and development, and online ad sales, while marketing services offers strategic planning, direct and database marketing, telemarketing, media planning and fulfillment.
In addition to being approved for listing on NASDAQ in August, MSGI acquired a 10% stake in Screenzone Media Networks LLC in July.
Screenzone is an interactive broadcast gateway that was developed to promote music, movies, live events and other entertainment over the Internet and at shopping malls (through interactive kiosks).
It seems MSGI has quite an eye for other companies specializing in various aspects of the nonprofit sector. In August, it bought an 18% interest in GreaterGood.com, a Web site that enables shoppers to buy branded products from such retailers as Amazon.com or OfficeMax.com and have 5% or more of the purchase price go to a selection of charities at no extra cost to the customer. GreaterGood also manages e-commerce sites for some nonprofit groups.
That propensity for seeking profits in the nonprofit area is only part of what made the Grizzard acquisition a smart move.
“It was good sense,” says Grizzard chairman/CEO Mike Dzvonik, “and there’s good chemistry between Jeremy [Barbera, MSGI’s chairman/CEO] and myself.”
What makes sense to Dzvonik and Barbera is that each company was outsourcing what the other could provide. Furthermore, there is no conflict of client bases; MSGI’s nonprofit clients are primarily cultural institutions, while Grizzard’s are humanitarian charitable organizations.
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