Earlier this week Aegis Group got in touch to gently challenge an assertion that the group had acquired two Swedish CRM/DM agencies
According to Aegis, the two very small acquisitions were intended to complement its existing operation in Sweden and strengthen its earning capability as a result. Excellent.
But the Aegis announcement actually gave this dollop of public relations speak: "Their acquisition offers Aegis a leading position in end-to-end relationship marketing in Sweden, enabling the existing operation, Lentus, to employ a full communication approach with all of Scandinavia in view."
It is of course likely that the two acquired agencies will give more commercial clout to the Lentus subsidiary, even though the two newcomers together can muster gross assets of only €824,000. But will that represent a "leading position"?
Surely the reality is that Aegis has taken opportunistic advantage of acquiring a couple of small operators to give more critical mass to the existing Swedish operation.
That sounds like tactics - perfectly laudable - but not a strategy.
Indeed the fundamental strategic question that every Aegis shareholder must want to know has nothing to do with two small agencies in Sweden.
It is simply this: where does the group as a whole think it is going?
When the current chairman John Napier arrived in 2008 it soon became clear that his aim was to "enhance shareholder value" - popular shorthand for selling off the poor performing components and pumping up the rest in the expectation that eventually they could be sold as well.
However, Napier has never acknowledged or denied that this is his strategy, even when .
Even today the company’s website still boasts a section describing Synovate’s future growth plans.
His communications team will readily assure any enquirer that the group is very happy with its business as it is today, adding as an afterthought that one can never say never to the possibility of sale.
. But what’s the strategy?
If Aegis really wanted to continue to expand as a successful independent company, why did it give back £200 million of the Synovate sale proceeds to its shareholders instead of using at least some of those proceeds to make a serious sized strategic acquisition? (Admittedly the group is virtually debt free now and could borrow some money for acquisitions if it wished to.)
The most likely explanation is that Napier has no intention of building Aegis over the longer term, but simply hopes to secure a buyer for the rump and hand over another fat cheque to shareholders. And he’s in no particular hurry to do that.
Indeed he will doubtless argue that it would be inappropriate to announce to the world that the intention is to sell the entire group when the right moment arrives - if indeed that is the unspoken plan.
However, it would be fun seeing who lined up with their cheque books. And it would certainly be instructive to know a little more of what is going on in Napier’s mind.
So into what sort of unspoken group strategy do the two little Swedish deals fit?
The Aegis spokesperson was at pains to explain that they would enhance the Aztec offer.
Aztec was the Sydney-based scan data service provider that was left behind when Synovate was sold. It’s been very profitable.
Does this mean that Aegis plans to develop a third leg - focussing on retail customer marketing - to complement Aegis Media and Isobar? We don’t know and Aegis isn’t saying.
Which brings us back full circle. So far the evidence seems to confirm that the acquisition of the two Swedish tiddlers has been carried out with no obvious strategic purpose.
That doesn’t mean they won’t make money.