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McKinney acquired by South Korea-based firm
DURHAM, Jul 31, 2012 (The Herald-Sun - McClatchy-Tribune Information Services via COMTEX) --
The Durham-based advertising agency McKinney has been acquired by Cheil Worldwide Inc., a South Korea-based communications and marketing firm that has offices around the globe and a long-standing relationship with the Korean technology company Samsung Electronics Co. Ltd.
McKinney, formerly an independent agency that is one of the original tenants of the American Tobacco development in Durham, will keep its name, leadership team and headquarters in the Bull City.
In addition, the acquisition is not expected to affect the agency's head count, said Brad Brinegar, the agency's CEO. McKinney employs about 200 people.
"We really liked our independence, and we've done very well through the recession, and we were having a lot of fun," Brinegar said. "But when the right call (comes), you have to listen."
McKinney wasn't seeking the acquisition, Brinegar said. Agency officials started talking with Cheil officials about six months ago.
"(Cheil) respects our way of doing things, they're going to give us the resources now to help us get bigger, better faster," he said. "So the trade-off is between a total, real, legal independence, and being able to get into an organization that understands that, and wants to help grow it."
McKinney is expected to play a "central role" in the reinvention of Cheil's marketing and communications network in the Americas and elsewhere, according to a news release about the acquisition.
Based in Seoul, South Korea, Cheil Worldwide Inc. is Korea's largest marketing communications network, the release states. The company operates 51 offices in 28 countries, and has about 3,000 employees.
Its marketing communications services include advertising, public relations, sports marketing, exhibition and display production, and production of large-scale performance events.
The company has a long-standing relationship with Samsung, said Rachel Hammerman, a Cheil Americas spokeswoman. Samsung, which makes mobile phones and memory chips, among other items, had a 2.6 percent ownership stake in Cheil Worldwide, according to its annual report from last year.
Cheil is one of Samsung's global advertising agencies of record, although the electronics company also works with other agencies as well.
Cheil officials are looking to maintain the company's relationship with Samsung, but to also diversify, Hammerman said.
"We are thrilled to partner with McKinney, one of the world's most creative and effective integrated ad agencies, to offer a significantly strengthened network of services to existing clients and to win new clients in the world's largest ad market," said Cheil Worldwide CEO Nack-Hoi Kim in a prepared statement.
McKinney will become part of Cheil Americas, a regional network of agency partners led by CEO Buz Sawyer.
The agency will join Cheil USA, Cheil Canada, Cheil Mexico, Cheil Central America, Cheil Brazil and The Barbarian Group, the release states.
"This isn't just another financial transaction in a summer of consolidation, though Cheil will provide McKinney with rocket fuel to take their business to the next level," Sawyer in a prepared statement.
Originally named McKinney & Silver, Durham-based McKinney was founded in 1969 in Raleigh. Brinegar became the chairman and chief executive of the agency in 2002, and led a buy-back of the agency from Havas Inc. in 2008.
Last year, the agency brought in $37.4 million in revenue, a total that was down 6.5 percent from the prior year.
Its revenues were impacted when CenturyLink's acquisition of Qwest affected McKinney's relationship with the acquisition target, Brinegar said.
The company's current client list includes Nationwide Insurance, CenturyLink, Sherwin-Williams, Lenovo, Mizuno USA, Gold's Gym, Meijer, Ruby Tuesday, Big Boss Brewing and Urban Ministries of Durham.
The agency's clients are "very happy and supportive" of the acquisition, Brinegar said. He also said that McKinney's senior management leaders also have long employment agreements with Cheil.
"Part of their commitment to McKinney ... they want us around as long as they can keep us, and give us the time to develop the next generation of leaders," he said.
McKinney moved in 2004 from Raleigh to Durham's American Tobacco campus, the downtown mixed-use development near the Durham Performing Arts Center that includes office and retail space.
Brinegar said McKinney was the last anchor tenant commitment needed to secure the financing for the redevelopment of the American Tobacco.
The agency made the move as a result of a change in the nature of the business that required greater collaboration between people, and also because of Durham's "creative ethos," Brinegar said.
"We also liked the fact that Durham was a little grittier, a little crazier, than Raleigh, and a little more creative," Brinegar said.
The agency was recently named the most effective independent advertising agency in the world by Effie Worldwide and WARC, the release states. In the past year, the agency has won 44 industry awards.
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