Corrections or additions?
This was published in U.S. 1 Newspaper on November 11, 1998.
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Life in the Fast Lane: Gillespie Sold
Dick Gillespie, founder of New Jersey’s largest
independent
advertising firm, wanted to hit the big time, to own one of the top
10 independent ad agencies in the nation. Now Gillespie, at age 54,
has made the big time, but not exactly in the way he had planned.
Instead the Gillespie Organization has been sold to the Interpublic
Group of Companies, a 27,000-employee holding company, where it will
be part of the McCann-Erickson WorldGroup.
“This alliance makes great sense because it will help us meet
our long-term agency goals more quickly,” says Gillespie. The
name stays the same, the firm stays in its Princeton Pike
headquarters,
and everyone gets to keep their jobs, but his agency can now draw
on the expertise of the firm that helped make Coca Cola famous.
McCann-Erickson
is known as a global advertising firm that positioned Coca Cola for
international success.
No purchase price has been released at this time, but Gillespie
disagrees
with an estimate from a trade publication, Advertising Age, that the
price was about $20 million. That estimate, he says, is based on an
outdated formula for calculating agency earnings based on a percentage
of billings, traditionally set at 15 percent. Gillespie reports his
annual capitalized billings as $140 million, and notes that
“agencies
that are integrated as we are, are selling at higher multiples. They
tend to make a higher profit margin and they are more in demand.”
The 120 employees — who have been in an Employee Stock Ownership
Plan since 1993 — will get one-third of the take. Because the
deal involved both cash and stock, they will get to replace their
privately held stock with Interpublic’s stock, listed on the New York
Stock Exchange as IPG and trading at about 65 on November 9.
“I am delighted for our employee shareholders who will benefit
greatly from the sale,” says Gillespie. “The advantage is
that it provides us with access to a far greater amount of research
technology, resources, and international capability. Interpublic Group
is an $11 billion corporation with every imaginable bit of syndicated
research that exists. It will allow us to tap into the research for
trend analysis information on international situations. Everyone here
is very thrilled.”
That leaves two-thirds of the takeover amount for Dick Gillespie,
the father of six children, ages 5 to 31, and a pillar of St. James.
Roman Catholic Church in Pennington. The sign in his lobby reads
“God
and Advertising; One is of heaven. The other is clearly of this world.
Yet, both can meet here”
“I turned this business over to the will of God 23 years ago,”
says Gillespie. “I really did pray long and hard over this. I
feel it has been God’s business and, if this was the right way, the
barriers would work themselves out and they did.”
Gillespie was born in Brooklyn and raised in Bergen County, where
his father worked for Met Life. His dream had been to be a sports
writer, so he majored in journalism at Pittsburgh’s Duquesne
University.
He ended up instead in the internal promotion division of Dow Jones.
After seven years there and mentoring from the likes of Bernard
Kilgore,
he started his own firm on Nassau Street in 1973. In the beginning
he had just one partner, Barry Pavelec (who soon left).
In 1985 he moved into a $2 million two-story building
on Clarksville Road, but by 1994 that was too small, so he purchased
the former Imo Delaval headquarters on Princeton Pike for about $4
million. With a focus on integrated marketing communications the
Gillespie
Organization does advertising/branding, public relations, event
marketing,
corporate design, and interactive marketing. The firm is particularly
strong in direct marketing and database work. Its clients include
Cushman & Wakefield, American Reinsurance, Elizabeth Arden Red Door
Salons, Duramed, Unified Financial Services, Household Finance,
Conectiv,
STS Tire & Auto Stores, Photopaint Technologies, Keystone Bank,
Electric
Schoolhouse, Randall Publishing, and Portmeirion USA.
Gillespie’s goal to get into the top 10 would have required a
seemingly
impossible $500 million in billings (billing figures include an ad
agency’s work plus the media buying fees). Nevertheless, the firm’s
billings had grown by 25 percent in past year and tripled over the
last five years, with such major wins as Cushman & Wakefield, American
Re, and the successes of a subsidiary, RAR Healthcare, that had been
acquired earlier.
Gillespie attempted to stretch his troops in new directions. In May
of 1996 he announced a “strategic alliance” (since abandoned)
with Midi Inc., the Thanet Circle-based interactive multimedia
company.
In December, 1996, he announced the hiring of a senior vice president
for technology marketing. And in April of last year Gillespie hired
the founder and staff of the Trenton-based Zoot Suit agency to create
a Gillespie division that specializes in marketing to families and
children.
Gillespie claims that, though he set that ambitious goal, “we
were never for sale, but the offers kept coming.” Though he was
represented by attorneys (Allen Silk and Dan Sheridan of Stark &
Stark)
and accountants (Dick Nowalk and Homer Smith of Nowalk & Associates,
plus Amper Politiziner & Mattia) Gillespie himself did most of the
negotiating.
“We had five offers in the springtime,” says Gillespie.
“Some
were domestic groups, some outside the United States. And as we were
talking with some of the potential suitors, we had two additional
calls here in the last 60 days, all very impressive names. We were
very honored to be considered.”
Rather than try to keep it a secret, he told the employees soon after
the buy-out offers began coming, about three months ago. “It was
important to me that our employees feel good about this,” says
Gillespie.
“It has been a relatively long process, of having them get to
know us, and of us getting to know them and feeling the comfort level.
But I did not lose a single minute of sleep,” says Gillespie.
“It is a first class organization.”
“I will tell you that I presented two offers to our board. I left
the room and said, `You tell me if you want to do this and which
one.'”
He declines to name the rejected suitor but notes, “They came
out where I wanted to be.”
“I had two main concerns, one that I wanted to be sure that
whoever
we partnered with would assist us in servicing our current and
hopefully
future clients. The other significant issue is that we be left
independent,”
says Gillespie. “Yes, we are going to still pay our own mortgage
and hopefully make money for them.”
McCann-Erickson WorldGroup has billings in excess of $13 billion and
operates in 123 countries. Its parent company is the third largest
ad agency (after Omnicom with its DDB Needham and WWP Group with J.
Walter Thompson and Ogilvie & Mather). It has a leading multinational
advertising agency network and six other global marketing
communications
companies, including McCann Relationship Marketing Worldwide.
“One of the great things about McCann-Erickson is its huge
international
network,” says John Wolfe, director of public affairs for the
American Association of Advertising Agencies in New York. “One
of its earliest clients was Coca Cola.” In the 1930s, long before
anyone thought about something called global expansion, Coca Cola
established market share in nearly every country. “McCann kind
of got them there.”
“We are the largest in the world in the most countries,” says
Susan Irwin of McCann-Erickson Worldwide, citing Nestle, Unilever,
L’Oreal, Mastercard, and Motorola as clients. “We are in 182
cities
in 123 countries.”
McCann-Erickson has bought 30 firms in 18 months, seven of them ad
agencies. “More and more advertisers need communications
capabilities
around the globe,” says Irwin. “They need a whole arsenal
of communications tools. A lot of the ad agencies are buying companies
that are best in class in various disciplines.”
“If Gillespie needs some help in China we have agencies at five
cities in China,” says Irwin. “If one of our clients in china
is expanding into the U.S. and Dick Gillespie can be of help we can
turn to him.” She says McCann is known for “respecting the
talents” of individual firms and has a hands-off policy unless
or until a firm gets into trouble.
“We will have the advantage of being attached to a worldwide
operation
but will still be independent,” says Gillespie. “That’s the
beauty of it. It is a great opportunity for us to jump start
ourselves.”
They will celebrate with a holiday party at Katmandu.
— Barbara Fox
Top Of PageAt Forrestal VillageThe Final Build-Out
Add another 76,500 square feet building to the other
three buildings that have broken ground so far, and you get 800,000
feet of office space under construction this winter. That’s by Greg
Lezynski’s count, and that includes buildings on Alexander Road,
Roszel
Road, College Road, and at the Carnegie Center.
His firm, Gale & Wentworth LLC, turns over the earth at Princeton
Forrestal Village on Tuesday, November 17, at 10 a.m. The three-story,
76,500 square foot building will be at 155 Village Boulevard, on what
is now the parking lot, next to the row of shops that includes Gerald
Cosby and Oshkosh B’Gosh, across from West Point Pepperell.
Though it sits cheek by jowl with the stores, this building will be
for office space and will rent for $26.50 per square foot, gross rent,
plus tenant electric. Designed by a Canadian firm, Rubin & Rotman,
in conjunction with Dennis Posen, it will feature a three-story
“glass
curtain,” a 30-foot expanse of glass that starts in the two-story
entrance atrium and continues to the third floor office space. The
lobby will have natural stone, glass, and wood-type finishes.
“The building will mimic the high design features of the other
buildings — with accent colors and precast elements,” says
Lezynski, vice president of the firm that formerly owned the Village
property. Now it manages the property and will also do the
construction
for the purchaser, Praedium, which is bankrolled by a venture capital
fund put together by Credit Suisse First Boston.
“This will be the last building at the Village,” says
Lezynski,
“and of the total of 725,000 square feet, there will be 305,000
square feet of office space.” He expects it to be finished by
October, 1999.
It’s been 12 years since the Village’s original developer, Scott
Toombs,
had such high hopes for combining an upscale retail center with office
space. Now, though the center struggles to keep its “warehouse
direct” retail areas filled, office vacancies are way down, to
three percent. That’s because, Lezynski says, the original
“village”
concept still works. “Everything here is in walking distance,”
he points out, comparing it to the Carnegie Center, “child care,
shops, restaurants, and covered parking, a host of amenities. That’s
what sets this building apart.”
Aspen Technology Inc., 3150 Brunswick Pike,CrossroadsCorporate Center, Suite 310, Lawrenceville 08648. Peter Caro, directorof sales northern region. 609-395-7766; fax, 609-395-7767. Homepage: https://www.aspentech.com.This software company has a new sales manager and has expanded from15 employees last year to 25 employees this year. It moved last monthfrom 101 Interchange Plaza to Crossroads Corporate Center.Headquarteredin Cambridge, it provides software to such bioprocessing clients asoil, chemical, and pharmaceutical companies.Top Of PageExpansionsCoastal Copy Systems, 202 West State Street,Trenton08608. Bernard W. Ozarowski, president. 609-392-7000; fax,609-392-3501.The 13-year-old office equipment firm has moved from 16,000 feet atCedarbrook Drive in Cranbury to a four-story building in Trenton,which it plans to buy. “Mercer County has always been a very largeclient,” says Bernard Ozarowski, “and they have always beena very special account of ours. It was time to move to Trenton.Trentonis nice. Not to take anything away from Cranbury, but we like walkingacross the street to get something to eat.””Bill Mate (executive director of the Mercer Chamber) helped mefind the building,” says Ozarowski. The building listed in U.S.1’s commercial space roundup last spring for a sale price of $259,000and $14 per square foot gross rent. It is being renovated by theowner,Joseph Pintinalli. Says Ozarowski: “Once the work is completed,we’ll buy it.”The move was made possible by the availability of about 12,000 feetof warehouse space at the former Hill Refrigeration complex for atotal of 18,000 square feet. Employing 45 people, Coastal Copy sells,leases, services, and supplies copiers, duplicators, and facsimileequipment, digital copiers, and printers. Phone and fax are new.RX Remedy Inc., 3705 Quakerbridge Road, Suite 205,Mercerville 08619. Peter Hoover, president. 609-452-9082; fax,609-452-8982.The pharmaceutical market research firm expanded from 3,000 feet at5 Vaughan Drive to 5,000 on Quakerbridge Road, where about 12 peoplework from this office. From Westport, Connecticut, it publishes healthadvice in RxEMEDY magazine, and management of that subscriptiondatabaseyields various research reports and direct marketing opportunities.TMC Corp., 2540 Route 130, Unit 117, Cranbury08512.Matthew Brooks, president. 609-860-1830; fax, 609-860-8980.This telephone system provider moved from 220 North Commerce Drivein North Brunswick to Route 130 and has new phone and fax numbers.Webcraft Technologies, 1009 Lenox Drive, PrincetonPike Corporate Center, Building Two, Building 4, Suite 201,Lawrenceville08648. Ted Sherwin, president. 609-671-4000; fax, 609-671-4037.Ted Sherwin moved this office of Webcraft Technologies to 12,300 feetin Building 4 (formerly occupied by IMO) from 10,000 feet that ittemporarily occupied at Building 2. Webcraft is a printing and directmarketing firm that brought its headquarters to the Princeton areafrom Horsham, Pennsylvania, last spring. It also has the large lotteryticket printing facility at Route 1 and Adams Station Road in NorthBrunswick (U.S. 1, May 6, 1998).With total sales of $326 million, Webcraft is the largest commercialprinter in the state. Its clients are direct marketers and it isespeciallyknown for its fragrance marketing. A sister database company doesfulfillment. It is owned by Big Flower, a $1.7 billion conglomeratebased in New York City.Top Of PageLeaving TownTubesales, 103 Carnegie Center Drive, Suite 109,Princeton 08540. Joseph DeVincent, corporate purchasing agent.609-520-8900;fax, 609-520-1493.The corporate purchasing office that had been located at the CarnegieCenter has been moved to Exton, Pennsylvania. The number:610-458-1300.The California-based firm, which manufactures steel tubing, also hasa 100,000 square foot facility in Center Point Industrial Park inCranbury.Top Of PageDeathsLarry Ellis, 70, on November 4. Former track coach atPrinceton, he was the first African-American head coach in the IvyLeague, and he coached the ’84 Olympic team.Linda Idel Schwartz Aronowitz, 56, on November 8. Shewas an administrative assistant at McGraw Hill/Business Week in EastWindsor for 30 years.Joan F. Schnorbus, 62, on November 7. She was a secretaryat Educational Testing Service.Edward Sullivan, 67, on November 7. He was an attorneyat Hartsough Kenny and Chase.Corrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
