ICrossing seeking buyers, hires BofA-WSJ

ICrossing hired Bank of America roughly six weeks ago after it received an unsolicited bid from publisher Hearst Corp, one person told the Journal. The company's board decided Hearst's offer was too low and decided to court other potential buyers.

The Journal said iCrossing has held early talks with several possible acquirers including advertising firm WPP Plc (WPP.L), Japanese advertising agency Dentsu Inc (4324.T) and Aegis Media, an Aegis Group Plc unit (AEGS.L).

ICrossing is backed by Goldman Sachs Group (GS.N) and Oak Investment Partners.
iCrossing's public relations director Dana Mellecker told Reuters: "We've had a very strong year and we have a lot of options available to fuel the continued growth of the company."

ICrossing is seeking about $400 million from bidders but could remain independent if it can't attract the right price, several people told the Journal. Hearst's original offer was around $250 million.

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But the next round of deal making is expected to have a different look. For decades, M&A activity in the marketing and ad industries has been dominated by global ad giants such as WPP, Publicis, Interpublic Group of Cos. and Omnicom.

Today, those ad conglomerates face growing competition from smaller, non-U.S. ad companies, such as Dentsu; private-equity firms like General Atlantic LLC and media companies, which are all trying to bolster their digital revenues.

Over the past few years magazine publishers, such as Condé Nast Publications and Meredith Corp., have bought small ad and technology firms, giving them the expertise to create digital promotions for advertisers. Earlier this month, Korea's largest ad company, Cheil Worldwide, bought Boston-based digital-ad firm Barbarian Group.

ICrossing, whose clients include Travelocity, Coca-Cola and Toyota Motor, has about 550 employees. It is led by Chief Executive Don Scales, the former CEO of Omnicom's Agency.com, and Chairman Richard Rosenblatt, former chairman of social-networking site MySpace.
Ad executives said Dentsu would be a logical fit for iCrossing.

The Tokyo-based company is trying to become less-dependent on its home market for revenue. It recently came up short in its efforts to buy Razorfish, Microsoft's digital-ad agency, which was snapped up by Publicis earlier this year for $530 million.

After dabbling in the U.S. ad market but failing to make its mark, Dentsu has become an aggressive suitor over the past year. President and CEO Tatsuyoshi Takashima has made no secret of the company's desire to find new acquisition targets. The company kicked off its M&A drive last year by buying McGarry Bowen, one of the largest independent ad boutiques in New York.

Other companies that have in the past expressed interest in iCrossing include General Atlantic, which owns AKQA, another big online ad firm, whose clients include Unilever, Microsoft's Xbox videogame console and McDonald's.

AKQA has long wanted to bulk up and eventually go public. A person familiar with General Atlantic said the company probably wouldn't participate in any bidding war for iCrossing.