At Forrestal Village

New in Town

Expansions

Leaving Town

Deaths

Corrections or additions?

This was published in U.S. 1 Newspaper on November 11, 1998.

All rights reserved.

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outdated formula for calculating agency earnings based on a percentage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 Page
At Forrestal Village

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,

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."

Top Of Page
New in Town

Aspen Technology Inc., 3150 Brunswick Pike,

Crossroads

Corporate Center, Suite 310, Lawrenceville 08648. Peter Caro, director

of sales northern region. 609-395-7766; fax, 609-395-7767. Home

page: http://www.aspentech.com.

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.

Headquartered

in Cambridge, it provides software to such bioprocessing clients as

oil, chemical, and pharmaceutical companies.

Top Of Page
Expansions

Coastal Copy Systems, 202 West State Street,

Trenton

08608. Bernard W. Ozarowski, president. 609-392-7000; fax,

609-392-3501.

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.

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

owner,

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.

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 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

database

yields various research reports and direct marketing opportunities.

TMC Corp., 2540 Route 130, Unit 117, Cranbury

08512.

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.

Webcraft Technologies, 1009 Lenox Drive, Princeton

Pike Corporate Center, Building Two, Building 4, Suite 201,

Lawrenceville

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

especially

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.

Top Of Page
Leaving Town

Tubesales, 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 Carnegie

Center has been moved to Exton, Pennsylvania. The number:

610-458-1300.

The California-based firm, which manufactures steel tubing, also has

a 100,000 square foot facility in Center Point Industrial Park in

Cranbury.

Top Of Page
Deaths

Larry Ellis, 70, on November 4. Former track coach at

Princeton, he was the first African-American head coach in the Ivy

League, and he coached the ’84 Olympic team.

Linda Idel Schwartz Aronowitz, 56, on November 8. She

was an administrative assistant at McGraw Hill/Business Week in East

Windsor for 30 years.

Joan F. Schnorbus, 62, on November 7. She was a secretary

at Educational Testing Service.

Edward Sullivan, 67, on November 7. He was an attorney

at 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.

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