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From ‘not wanting to get out of bed’ to a ‘missing piece’ deal: Virginia Hyland and Matt Houltham on Havas Media’s indie acquisition
Last week, Havas Media made a big announcement: It had snapped up reputable indie, Hyland. Here, Matt Houltham and Virginia Hyland - chief executive of Havas Media and founder of Hyland respectively - tell Mumbrella's Brittney Rigby why the deal is a sign of strength during market weakness from Havas, and a sign of hope for other independent agencies that are 'slogging it right now'.
While Havas Media’s acquisition of independent media agency Hyland was only announced last week, the deal was two years in the making. Havas chair Mike Wilson and Hyland founder Virginia Hyland have known each other for 20 years – Wilson had to move desks when Hyland asked Mediaedge, now Wavemaker, “Could I please have one desk?” to set up her business – but started talking about the possibility of a sale a couple of years ago over coffee.
The “conversations got louder and stronger”, Hyland explains, at the end of last year; the two agencies had been working together on the Kitchenaid account for a number of months and realised “we really had, culturally, two very similar teams”. But a few months later, COVID-19 hit, and Hyland was suddenly confronted with the possibility that the business she’d spent 15 years building up could vanish, along with the Havas deal.
“I’ll never forget the end of March, when one hundred percent of my clients called me and said ‘We’re canceling our advertising’,” she recalls.
“It was like looking down the barrel of the gun. Like, ‘Oh my God, what am I going to do?’ [What] flashed before my eyes was 15 years of slog, trying to build something from scratch, and having that taken away from me in an instant.
Houltham, Hyland, and Wilson
“And even then, at that point, going ‘My god, the Havas conversation will come to an end’ … So I went from not wanting to get out of bed of a day, trying to shelter and trying to just take one step at a time through the beginning of COVID, to now bounding out of bed with excitement and energy, knowing what’s possible, the potential to grow again, to be able to get out there and shake the trees and really prove what we can do on a bigger scale.”
Closing a deal during COVID, and ‘growing with the right partners’
Hyland is quick to point out that she “actually wasn’t out there looking to sell” her eponymous agency at all. But she saw the opportunity for Hyland to become part of a “much bigger digital performance team, CX teams, and UX teams”. And so, “with that in mind, we started to have financial discussions”.
“If you were to speak to any of the other global networks or any of the consulting firms, they’d confirm that they’ve never had a discussion with me,” she says emphatically.
“So it wasn’t the regular sale process because, genuinely, I was really happy with how Hyland was performing in market.
“Now, COVID did throw a bit of a spanner in the works, but equally for me, it made it even more clear that the next two or three years in my business, we’re going to be treading water just to stay still. I’m not going to have the ability to invest in new resource[s] when revenue and money is down.”
Hyland and Havas Media have been working together on the Kitchenaid account since last July
Havas Media chief executive Matt Houltham – who took over from Wilson late last year when Wilson stepped into the chair role, with a specific focus on exploring M&A opportunities – agrees; it was “a really strong strategic fit”.
“It enables us to continue to expand the breadth of our capabilities and the depth of our capabilities, particularly in the content creation and social area,” he explains.
“We wanted to continue to build the scale of the business in Sydney and this gets us to a magical number of over a hundred, with the new teams together. And I think that opens up new opportunities for us as well, because it gives us a chance to chase larger clients and pieces of business.”
An acquisition such as this in the middle of a pandemic and ensuing recession is a big move. But Havas wasn’t “dissuaded by the impact of COVID,” Houltham notes. He’s “pleased that we managed to carry on with what was the right strategic decision” and says that persisting with the deal is “an important signal of our intention to continue growing with the right partners”.
Does that mean future acquisitions are on the horizon?
“We’re not in any hurry to do anything else at the moment”, but “the door’s not closed and if we are approached by the right potential partners, I think Havas is still a relatively small operation in the Australian marketplace. And we have ambitions to continue to grow, organically or not organically if we find the right partners to work with.”
The ‘demise’ of Hyland and indies?
Hyland has always been a vocal advocate of the value independent agencies bring when pitted against their holding company counterparts. But she refutes the suggestion made by Mumbrella’s Tim Burrowes on last week’s Mumbrellacast that the transaction is the “demise” of her agency: “Tim has a wicked sense of humour.”
Instead, Havas’ performance division is “actually my missing piece, I would say, in my puzzle”.
“Everything I’ve done for Hyland has been out of my own back pocket,” she explains.
“I have had to invest and spend every penny, with many sleepless nights, to build this business. And when you’re building a business, you’re never running a highly profitable [business] because you’re building all the time and you’re investing ahead of the curve.
“As much as my ego can get in the way and go ‘Well look, I’ve got my name on the door’, the reality is, I always have to think: What is best for our clients? What is going to help them drive growth in their business? And this was actually the partnership that would help do that.
“I am still a big advocate of indies. It’s really a dream that you can work your butt off for 15 years, through tears and stress and fears, and end up in a position like we’re in today, even in the middle of COVID. That should give hope to a lot of indies out there to keep on doing what they’re doing, because they can realise their potential and have some financial success along the way.”
Hyland says she’s still a fierce supporter of indies
Does that mean the pool of remaining independents should be hoping that holding groups start circling, ready to snap them up?
“What I’m talking about is not necessarily being bought, but being recognised and admired and respected in the industry,” she clarifies.
“You can either continue to run your independent agency for another 50 years, or there are other options as well.
“[Independent owners] are slogging it right now. They’re all having a tough time, as everyone is. It’s just knowing: don’t give up. There’s possibility out there for everyone. [You] just have to make it through the tough times and the good times. And that can lead to some great future partnerships.”
The founder’s team of 30 are all supportive of the move; while they signed up to work for an independent, that’s also meant “slogging it side by side with me,” Hyland explains.
“As much as we’re growing, it’s hard work and that work never stops,” she says. “And so for them, it’s a rebirth of new opportunities that they can potentially bring into Havas and learn from Havas as well.”
Becoming part of Havas Media as the ‘Hyland Division’ was also crucial; keeping the name alive preserves the brand’s goodwill, and signals its founder’s commitment to being involved with Havas for the long haul.
Retaining the brand “was a major part of the consideration for me in joining with the Havas guys. What was really important is the way they treat business owners and entrepreneurs. And if you look at Host/Havas as an example, locally, a lot of the Host team are still there … and that’s 10 years on, since Havas acquired Host.
“And so from a Hyland perspective, I’m not going anywhere for a very long time and Hyland will definitely be living on, absolutely, a hundred percent. It’s important, because we’ve built such a great name in the market and we’re respected.”
In her new role as managing director of the division, Hyland will continue to focus on the client roster she brings with her, which includes Coty, Church & Dwight, Etihad, and Deliveroo in addition to Kitchenaid. She’ll be “hustling, I will be out there in market talking about what we can do for clients, and trying to get on bigger pitches, trying to have different conversations with clients that I couldn’t have before, because I didn’t have some of those capabilities within the agency”.
“I’m going to be able to run harder and faster,” Hyland promises.
“I’m going to be able to put my energy back into running the day to day business, as opposed to waking up every morning worrying about payroll. Do I have enough money in the bank to pay everyone this month?
“So I feel very free. And so I’m able to actually give more energy back to my clients and my team.”
‘2021 is going to be a massive year for Havas Media’
Houltham’s been the boss of Havas Media for less than a year, and it’s been one that’s difficult to describe “without using expletives”. He acknowledges that “some days you think, goodness, this was terrible timing and a terrible decision”, but he’s learnt “that even when strange things happen, if you’re working with great people who are resilient, then you can work through it”.
Despite the challenges, he’s confident that “clients are starting to return to something that feels like normal spending. I think there’s optimism in the market, and that sets us up really well for next year … We are in a really strong position, and with the addition of the Hyland team coming into the mix, I think 2021 is going to be a massive year for Havas Media.”
The Hyland deal, in fact, has been “the light at the end of the iso tunnel” and “something very exciting to focus on” as he navigates Melbourne’s continued lockdown. And, just like Hyland’s workforce, Houltham’s team and clients share in that excitement.
Clients “see it as fresh blood, new talent, a bigger team”, and staff “have all been really enthusiastic about it because the same thing applies to them.
“They know that as the business gets bigger and as we bring more people into the team with new clients to work on, there are increasing numbers of opportunities for them, for their own development.”
Houltham
He cites people who have worked together on the Kitchenaid business, or at other agencies, as proof of the “cultural and social connections as well as business connections in the teams”.
“And so those people, on both sides of the fence, have been really great advocates of why we’re a good cultural fit and why it’s going to be a great thing to bring the teams together.”
Achieving that integration during a pandemic is difficult, however. Houltham explains that “we’ve got a whole program in place to ensure that we’re welcoming the Hyland Division into the team in an appropriate manner. We’ve done a lot of work behind the scenes to ensure the transition for them is as smooth as possible.”
Until the impacts of COVID-19 are alleviated, though, the team will work in the office in “split cycles”. The ‘Hyland Division’ will officially move across to the Havas Village on Monday, with “their own area”, and work on the same office schedule. “They’re still together, but they’re just going to be operating out of a slightly fancier office” than the indie’s previous space in Bauer’s famous Park Street headquarters, according to Houltham.
But, Hyland laughs, one person who certainly won’t be moving is Wilson: “I’ve asked him if he has to move desks this time and he said no, he will not be.”
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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Heartfelt congrats Virg and well deserved. DJ
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