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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
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
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.
is known as a global advertising firm that positioned Coca Cola for
No purchase price has been released at this time, but Gillespie
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outdated formula for calculating agency earnings based on a percentage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
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
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
He ended up instead in the internal promotion division of Dow Jones.
After seven years there and mentoring from the likes of Bernard
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
Organization does advertising/branding, public relations, event
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,
STS Tire & Auto Stores, Photopaint Technologies, Keystone Bank,
Schoolhouse, Randall Publishing, and Portmeirion USA.
Gillespie’s goal to get into the top 10 would have required a
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
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
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
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 &
and accountants (Dick Nowalk and Homer Smith of Nowalk & Associates,
plus Amper Politiziner & Mattia) Gillespie himself did most of the
"We had five offers in the springtime," says Gillespie.
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
"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
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
we partnered with would assist us in servicing our current and
future clients. The other significant issue is that we be left
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
companies, including McCann Relationship Marketing Worldwide.
"One of the great things about McCann-Erickson is its huge
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
in 123 countries."
McCann-Erickson has bought 30 firms in 18 months, seven of them ad
agencies. "More and more advertisers need communications
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
but will still be independent," says Gillespie. "That’s the
beauty of it. It is a great opportunity for us to jump start
They will celebrate with a holiday party at Katmandu.
— Barbara Fox
The 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,
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
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
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
"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
It’s been 12 years since the Village’s original developer, Scott
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
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."
Corporate Center, Suite 310, Lawrenceville 08648. Peter Caro, director
of sales northern region. 609-395-7766; fax, 609-395-7767. Home
This software company has a new sales manager and has expanded from
15 employees last year to 25 employees this year. It moved last month
from 101 Interchange Plaza to Crossroads Corporate Center.
in Cambridge, it provides software to such bioprocessing clients as
oil, chemical, and pharmaceutical companies.
08608. Bernard W. Ozarowski, president. 609-392-7000; fax,
The 13-year-old office equipment firm has moved from 16,000 feet at
Cedarbrook Drive in Cranbury to a four-story building in Trenton,
which it plans to buy. "Mercer County has always been a very large
client," says Bernard Ozarowski, "and they have always been
a very special account of ours. It was time to move to Trenton.
is nice. Not to take anything away from Cranbury, but we like walking
across the street to get something to eat."
"Bill Mate (executive director of the Mercer Chamber) helped me
find the building," says Ozarowski. The building listed in U.S.
1’s commercial space roundup last spring for a sale price of $259,000
and $14 per square foot gross rent. It is being renovated by the
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 feet
of warehouse space at the former Hill Refrigeration complex for a
total of 18,000 square feet. Employing 45 people, Coastal Copy sells,
leases, services, and supplies copiers, duplicators, and facsimile
equipment, digital copiers, and printers. Phone and fax are new.
Mercerville 08619. Peter Hoover, president. 609-452-9082; fax,
The pharmaceutical market research firm expanded from 3,000 feet at
5 Vaughan Drive to 5,000 on Quakerbridge Road, where about 12 people
work from this office. From Westport, Connecticut, it publishes health
advice in RxEMEDY magazine, and management of that subscription
yields various research reports and direct marketing opportunities.
Matthew Brooks, president. 609-860-1830; fax, 609-860-8980.
This telephone system provider moved from 220 North Commerce Drive
in North Brunswick to Route 130 and has new phone and fax numbers.
Pike Corporate Center, Building Two, Building 4, Suite 201,
08648. Ted Sherwin, president. 609-671-4000; fax, 609-671-4037.
Ted Sherwin moved this office of Webcraft Technologies to 12,300 feet
in Building 4 (formerly occupied by IMO) from 10,000 feet that it
temporarily occupied at Building 2. Webcraft is a printing and direct
marketing firm that brought its headquarters to the Princeton area
from Horsham, Pennsylvania, last spring. It also has the large lottery
ticket printing facility at Route 1 and Adams Station Road in North
Brunswick (U.S. 1, May 6, 1998).
With total sales of $326 million, Webcraft is the largest commercial
printer in the state. Its clients are direct marketers and it is
known for its fragrance marketing. A sister database company does
fulfillment. It is owned by Big Flower, a $1.7 billion conglomerate
based in New York City.
Princeton 08540. Joseph DeVincent, corporate purchasing agent.
The corporate purchasing office that had been located at the Carnegie
Center has been moved to Exton, Pennsylvania. The number:
The California-based firm, which manufactures steel tubing, also has
a 100,000 square foot facility in Center Point Industrial Park in
Princeton, he was the first African-American head coach in the Ivy
League, and he coached the ’84 Olympic team.
was an administrative assistant at McGraw Hill/Business Week in East
Windsor for 30 years.
at Educational Testing Service.
at Hartsough Kenny and Chase.
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