Buying an Agency Without Destroying Its Value
What advertising M&A reveals about hidden dependencies, integration and the fit between a business and its buyer.
An agency acquisition can look strong on paper. We look and believe that we see a good match of clients and sectors, specialist skills or IP that we need. We’ve worked out that we will benefit from shared costs and we might even have a shot at scale if things go well. So why does putting the firms together still damage the ties and working habits that made the deal look good in the first place? Why do so many acquisitions fail to deliver the promise? Why is it so difficult to make things work and why is it so frustrating to work in these post-acquisition businesses?
This issue sits at the heart of my Executive MBA final project at Imperial College Business School, which I finished in November 2025. The paper looks at how private equity and strategic buyers like agency networks and consultancies can chase value in advertising firms without wrecking the capabilities they are buying.
The central argument is simple and, for those of us who work in these firms, it also seems glaringly obvious. Creative businesses need an approach that treats the “soft” assets as real. The numbers still matter, of course, but you also need a clear picture of how talent, client trust and teamwork produce the earnings on the table.
Understand what you are buying
An agency’s real strength sits partly in individual skill and partly in how people work together. A client relationship often rests on one specific mix of creative lead, account knowledge and delivery skill. You will not find that strength written on a contract or an org chart.
Digital work is the same. A big slice of revenue marked “digital” tells you almost nothing about how hard it is to copy or replace. The better questions to ask are: do they own the tools, does the work come back and how deep do their skills sit inside the client’s daily operations?
Due diligence has to stretch beyond financial analysis and a cursory look at operations. Check the earnings, of course. Also map the people, relationships and routines that keep those earnings coming and how the deal itself might break them.
Map the connections that a deal could break
Agency carve-outs show this most clearly. A unit can have its own clean P&L and still lean on shared talent, intellectual property, client teams or the parent’s name.
The paper calls these soft interdependencies. They are easy to miss because most of them run informally. Cutting the legal entity free does not automatically rebuild the conditions that made the unit work inside the larger group.
Here is a practical test. Work out what the business needs to keep serving clients after the split, then decide who will supply it. Transition design and implementation may have to go beyond finance and IT into the client-delivery skills. If the buyer cannot keep or replace those links, the deal needs a closer look.
Sequence integration around client value
Roll-ups promise wider skills and more chances to serve clients. Shared ownership alone does not make people collaborate or make the service better for the client.
Separate incentives can leave the new group fighting itself. Pushing the same systems and processes in too fast can destroy the creative habits and relationships the value rests on.
The research says sequence the work. Lock in the key people and client relationships first. Agree how the teams will work together. Only then chase the cost savings and only in ways that still help delivery. Judge the integration by what gets better for the client, not just by the numbers in the deal model.
This is not a call to keep every old habit but to look at which habits create the value before you change them.
Match the buyer to the work required
Private equity and strategic buyers might want the same things but for different reasons. The sharper question is whether this particular buyer has the skills, the incentives and the time to deliver the change it claims it will make.
A strategic buyer may be well placed to plug specialist creative skills into an existing client and technology network. It can also crush those skills with bureaucracy or too much standardisation. Private equity can suit deals where the operational fixes are clear and can be done inside the investment window. A deeper cultural transformation asks for something else.
The paper treats buyer–strategy fit as part of the investment decision itself. The integration plan and the ownership timeframe have to make sense together.
A framework for asking better questions
I designed the Framework for Creative Industries (FCI) to organise the assessment around four areas:
- Industry dynamics: how disruption hits the target’s business model.
- Value creation opportunities: where the capabilities and client relationships give a real path to growth or better delivery.
- Integration risk: which cultural, operational and informal links the deal could break.
- Investment horizon and buyer–strategy fit: whether the owner can back the needed changes for long enough.
The framework is there to make these points explicit and open to argument. It helps structure the diligence and the integration work, but it is important to note that it is not a proven predictor of returns.
About the research
The project mixes semi-structured interviews done between May and September 2025 with deal documents, industry reports and academic papers. It builds an explanatory framework from those sources.
I would love to improve upon it. If you are interested in helping, I would be happy to offer help in return in any way I can. You can connect with me on LinkedIn or email me.
For example, as it stands, the paper cannot and does not claim to be a statistically representative comparison of outcomes.
Also, the interview sample is small. Views differ by role. Hard numbers on client retention and talent exits are often missing. The findings point to mechanisms and conditions that are worth testing. They do not prove that one ownership model always beats another. Longer-term, comparable deal data would be hugely valuable, as they would enable me to test the framework more tightly.
This overview covers research finished in 2025. It is not an update on later industry moves.
Read the full paper
Unlocking Value or Destroying It? A Comparative Framework for Private Equity and Strategic M&A in the Advertising Industry — Daniel Jones, Imperial College Business School, Executive MBA final project, November 2025. PDF, 136 pages.