LBi and Bigmouthmedia Merge to Focus on Global Expansion

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European digital agency LBi has announced it is merging with U.K-based search marketing firm Bigmouthmedia, and taking on an additional $54 million (€40 million) in funding to drive expansion in the U.S., Asia, and the Middle-East.

The companies say the combined entity, which will continue trading under the LBi banner, will be better positioned to meet clients' needs and to "capitalize on the structural spending shift from offline to online channels." In addition, the funding will help drive global expansion, and "further industry consolidation," the companies said.

Commenting on the merger in a press release, Luke Taylor, CEO of LBi claimed the transaction would crown the agency as the largest in Europe, encompassing 1,800 staff across 15 territories. "This is a transformational deal in a growing market. Combining these businesses will enable us to offer our clients digital marketing, consulting and technology services wherever they operate, all under one roof," he said.

Headquartered in Amsterdam, LBi already currently has a presence in a number of European territories, as well as offices in Atlanta, New York, Mumbai, and Abu Dhabi, offering a range of digital creative and technology services. Bigmouthmedia focuses on the search space, providing search engine optimization, paid search, and affiliate marketing services.

On the Bigmouthmedia company blog, Head of Strategy Andrew Girwood said the combined entities would offer, "end-to-end integration over disciplines such as social media, SEO, PPC, digital media planning, branded content creation, campaign creative, usability, affiliate marketing, copywriting, web design, build, technical design, social CRM, performance measurement and application support. Loads."

LBi clients have included MasterCard Worldwide, UBS, Coca-Cola, and Sony, and the U.K. branch recently won a high-profile account with the Conservative Party. Bigmouthmedia has also worked with major global brands including Tesco, eBay, and Starbucks, and a range of retailers.

Senior LBi executives will retain their roles at the merged company, with Taylor remaining CEO, Fred Mulder as chairman, and Huub Wezenberg as CFO.

Under the terms of the deal, Bigmouthmedia will take $54 million in private equity from investors Carlyle Group, Cyrte, and Janivo, to create a new group dubbed Obtineo. LBi will then merge with Obtineo, and hold 51 percent of the combined entity, with Bigmouthmedia claiming a 25 percent stake, and Obtineo's new shareholders 24 percent.