Transcon bought a portion of Redwood it didn't already own, story says
[This post has been updated] Redwood Custom Communications' parent company in Britain may license the Redwood brand to go into competition with Transcontinental Custom Communications which bought the Redwood North American operations this week.
According to a story in Brand Republic, Transcontinental had been (somewhat quietly) a 50% owner in Toronto-based Redwood CC and the sale was essentially the takeover of the other 50% owned by Omnicom Group.
Omnicom, which is a strategic holding company that manages a portfolio of advertising, marketing services, specialty communications, interactive/digital media and media buying services, wanted to sell because it wants full control of its overseas operations:
According to a story in Brand Republic, Transcontinental had been (somewhat quietly) a 50% owner in Toronto-based Redwood CC and the sale was essentially the takeover of the other 50% owned by Omnicom Group.
Omnicom, which is a strategic holding company that manages a portfolio of advertising, marketing services, specialty communications, interactive/digital media and media buying services, wanted to sell because it wants full control of its overseas operations:
While the Canadian business had been profitable every year, according to Redwood, the publisher said it is now keen to have full control over overseas operations.Related post:
The offer from Transcontinental means that Redwood will now be free to licence its name in a new North American venture, likely to be in the US, where it will share resources with sister agency network BBDO.
Redwood UK chairman Christopher Ward said: "Our joint venture with the two co-founders, Eric Schneider and Mitch Wine, has been a successful and profitable one, but Redwood now needs more flexibility in the way we service global clients."
"The Omnicom agency network provides an attractive creative alternative to the establishment of multiple publishing centres with duplicated overheads.
"For instance, by launching Mazda's global customer magazine Zoom Zoom in partnership with Proximity Tokyo, we have been able to tap into local intelligence while establishing dedicated creative teams in Mazda's key markets around the world.
"This is the model we will be developing to exploit the growing global opportunities in customer communications, whether in print or digital formats, in the United States as well as other world markets."
posted by D. B. Scott at
8:48 pm
5 Comments:
This is silliness. Transcon did not own part of Redwood. It's clear that the author of this story made a mistake. Schneider and Wines had nothing to do with Transcon.
As a public company, Transcon would have been obliged to say it was buying remaining shares.
I'm surprised you would make a mistake like this. It's very bad for your credibility.
We attributed the story to a source that has proven generally reliable. If it is a mistake, we'll be happy to correct it. The assertions in your anonymous comment, however, is not the basis for a correction. A couple of facts would help.
Just phone Redwood or Transcon and ask.
It's obviously a mistake.
Transcon has a deal with Seven Squared which is a Redwood competitor.
Also, it doesn't hold secret shares in competitors.
This should have set the BS detectors ringing.
It does seem odd that a public co. would have an undisclosed interest, but if it was held thru a holding-company sub., it may have been described in terms of LOB, rather than named, in the more visible public docs, such as annual reports. It also seems odd that Transcon would compete with Redwood (is its U.K. partner still in the game? Transcom hired one of Redwood's top account execs away last summer to head up its new custom ops, which didn't square with the Seven Squared joint venture). It's also difficult to believe Redwood has been profitable every year -- the company became a big success when the low Canadian dollar helped it get a bunch of U.S. clients, and boosted Redwood's profits (since it was paid in U.S. dollars). Kraft went south when the Canadian dollar went north, making using a long-distance custom publisher just as expensive as using one closer to home. Redwood has not recovered. As for Eric Schneider continuing at the helm of an autonomous Redwood -- yes, but for how long? Transcon will soon want to eliminate duplicate overheads. And Schneider. who's used to a controlling shareholder conveniently located across the pond, may not enjoy one that's a few subway stops up Yonge. BTW, if Transcon did have a silent interest in Redwood all this time, maybe it's also been quietly accumulating Rogers shares, too -- it would be one explanation for the appointment of one of its execs to Rogers board earlier this year. Does Transcon have a master plan to take over Canadian magazine publishing? The Redwood purchase dealt St. Joseph a blow in the loss of significant printing business.
Frome a CP story by Ross Marowits:
"Transcontinental paid cash for the 75 per cent of Redwood that was owned by U.S. communications giant Omnicom. Redwood CEO Eric Schneider, who owns 25 per cent, remains an equity partner.
The 44-year-old Schneider said he wanted to join forces with Transcontinental because it shares his vision to grow the business.
'What I have been hankering for is a much more engaged and involved partner,' said Schneider, who will continue to lead the acquired operation, which has offices in Toronto and New York."
Yes, just what everybody who's ever got used to doing their own thing hankers for -- a new boss looking over their shoulder.
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