Dentsu acquires 51% stake in Taproot, Management (&creative) controls stay with Agnello Dias and Santosh Padhi

29 Aug,2012

By Ravi Balakrishnan

 

Japanese advertising behemoth Dentsu has acquired a 51% stake in Taproot, arguably the most creative among the Indian independent advertising agencies.

 

Taproot's Agnello Dias (left) and Santosh Padhi (right) with Rohit Ohri of Dentsu (centre)

With several of the most popular recent campaigns like ‘Har Ek Friend Zaroori Hota Hai’ and ‘Joh Tera Hai Woh Mera Hai’ for Airtel and ‘Change the Game’ for Pepsi under its belt, the five year old agency has seen a meteoric rise. It’s also won critical acclaim; the most recent being a Gold Lion at Cannes along with Ramesh Deo Productions for the ‘I Am Mumbai’ film for Mumbai Mirror, a newspaper from the Times Group, which also publishes The Economic Time

 

The managements at both Dentsu and Taproot declined to discuss the financial aspects of the arrangement. Industry observers estimate the initial upfront payout at Rs 60 crore with another Rs 80 crore expected in future earn-outs

 

In a global deal in July, Dentsu had paid $4.9 billion for British media buying group Aegis, valuing the company at 12 times its earnings before interest, taxes, depreciation & amortisation.

 

The Economic Times had reported in June that Dentsu among other agency groups was speaking to Taproot about a possible acquisition. Says Rohit Ohri, executive chairman, Dentsu India group, who has previously worked with one of Taproot’s founders Agnello Dias at JWT: “They (Taproot’s co-founders & chief creative officers, Dias and Santosh Padhi) could have chosen anyone. What convinced them about Dentsu is that we are very entrepreneurial and evolving; and more willing to look at out of the box ways of working.”

 

Adds Dias: “We felt it was the right thing to do. Of all the conversations we had, we felt most comfortable with the equation we were sharing with Dentsu. Another reason cited is Dentsu’s global strengths in the digital medium and that it is currently the leading network in Asia.

 

Taproot will retain its identity and won’t be rebranded. Although Dentsu is a majority owner, management control of the agency continues to rest with Dias and Padhi. Dias says, “In terms of changes, there’s nothing in the pipeline. I think even Dentsu is saying ‘why should we upset a system that’s doing so well’?”

 

What the arrangement brings Taproot is integrated communication, superior execution abilities and a national network. As far as Dentsu is concerned, Taproot, says Ohri, “is really the creative firepower we needed in the group.” However, the firepower is not likely to be immediately applied to any of Dentsu’s current client relationships.

 

Both partners believe that Taproot will step in only when needed “on a case by case basis” according to Padhi. Interestingly enough, two of Taproot’s most productive client relationships have been with Airtel and Pepsi, brands that Ohri worked on in a previous stint at JWT. Ohri regards this as “a great bonus”, but he cites the talent of the two principals at Taproot and the chemistry with senior management at Dentsu as the main reasons for the merger.

 

Among a spate of recently launched creative-led independent agencies which include Creativeland Asia and Scarecrow Communications, Taproot has arguably been the most successful with several marquee campaigns to its name for Airtel, Pepsi and The Times Group.

 

The agency was founded in 2008 when Dias (then national creative director at JWT) decided to join forces with former colleague Santosh Padhi (executive creative director at Leo Burnett at the time). The 33 person strong agency has been particularly successful in wresting business from Dias’ former employer JWT, landing prestigious assignments from Pepsi and Airtel.

 

 

 

Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

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