Price tag of The Monkeys sale to Accenture was $63m, AFR reveals
The deal for Accenture Interactive to buy creative agency The Monkeys was worth $63m, it has finally emerged.
The price for The Monkeys – the most successful independent creative agency in the country – has been the subject of intense speculation since it was sold in May.
But today’s Australian Financial Review reveals that the value of the deal was $63m, with most of the money going to the three co-founders Mark Green, Scott Nowell and Justin Drape. According to the AFR, another four staff were also shareholders – ECD Fabio Buresti and MD Matthew Michael plus David Park and Nicholas Jackson from sister design agency Maud, which was also sold.
The Monkeys co-founder Mark Green, presenting to this year’s Mumbrella Awards jury
The newspaper reports that the $63m sum amounts to a multiple of 17 times the company’s 2016 financial year EBITDA profit. The company’s profit before tax was just under $2.5m and it’s EBITDA (earnings before interest, tax, depreciation and amortisation) profit was $3.7m. Turnover was nearly $22m, says the AFR, which has obtained a summary of The Monkey’s P&L accounts.
The Monkeys P&L | Source: AFR
The AFR reports that although the deal consists of an upfront sum, followed by payouts over the coming years, these are unusually not tied to the company’s financial performance, but to metrics around staff retention. If correct, the arrangement would be as a strong sign that Accenture is determined to retain The Monkey’s culture and avoid the distraction that sometimes occurs during sales processes where founders become focused only on hitting short term targets.
The Monkeys currently has 130 employees – the deal prioritises hanging on to them
The deal is seen as the strongest signal yet of the interest being shown in the marketing sector by big consultancies such as Accenture, PwC, Deloitte, KPMG and EY.
The high profit multiple is also an indication of the competitiveness being shown by the consultancies trying to get into the space, along with the fact that The Monkeys – which began just over a decade ago – was the most attractive target for acquisition. It will also strengthen the hand of other independent agencies seeking to negotiate their own sales, which often occur in the sector at a multiple of around 10 to 12 times profits.
The agency has a reputation for offering the relatively rare combination of creative but effective work at scale. The Monkeys was named both independent agency of the year and full service agency of the year at the Mumbrella Awards last month. And the agency’s Spring Lamb campaign for Meat & Livestock Australia was named ad of the year.
https://www.youtube.com/watch?v=-9Ka3a7cdYw
At the time of posting, The Monkeys could not be reached for comment.
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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That multiple is extraordinary. Would love to know how long the principals have been contracted for.
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That multiple is ridiculous. Almost makes Photon / Enero look smart…
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Good on them.
Good work, real clients.
Always authentic.
Glad they got a really good price – it’s good for everyone
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Nice one…The Monkeys team (if you can get it)…that’s four times what it is actually worth in the market at a 18 times multiple earnings…. Accenture just bought Photon or was it Enron…. I wouldn’t bank on the second tranche….but enjoy the money upfront while you can….well done boys…
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mmm, well done guys, you do good work and have built a very good reputation in a relatively short period of time. Make no mistake it is avery tough market and this business has performed very well.
However 17 times is quite simply ridiculous……..I suggest the detail around the earn out would be a good read
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Story goes the consulting companies base the multiples on revenue not profit unlike holding companies. They supposedly buy client opportunity not bottom line profit to drive share price.
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The founders also released this video in response
https://www.youtube.com/watch?v=kMFJBd40Awo
🙂
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Lol
Ego > Sense
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The monkeys pass the good blokes test. They can trusted. Congratulations all.
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Remind me to NEVER take business advice from Accenture. What’s their line of work again?
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In an industry when you are only three phone calls from disaster…that is crazy…. good luck if you can sell tone of these guys… I think it should say $63m valuation during the deal…as the ‘price tag’ suggests it is fixed, which would be very rare for the industry in such deals…due to future years earnings averages…. given the previous year profits…the multiple over the last two years in much higher….crazy stuff…. Accenture has plenty of money to burn…clearly….
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those numbers are not right – either the sale cost or the P&L are vastly different
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Not sure whats more shocking…..that Accenture would even consider paying such a ridiculous multiple, or that Australia’s best creative agency only makes $2M profit a year?! Load in the regional costs that multinational agencies have to pay, and they wouldn’t even make a profit!
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Congratulations, in an industry that is allegedly dying, its great to see a local success story..
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They’re worth what someone will pay for them and that is always the case for every acquisition. If Accenture felt they needed what they believed only The Monkeys had, then that’s what they are prepared to pay. That’s what they’re worth.
Good on them.
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Too true.
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and in the Monkeys case….they’re only 1 phone call from Telstra away from disaster.
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profit is $3.49m
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