Search heavyweight Bigmouthmedia today announced a merger with LBi, one
of the top digital marketing agencies, to create “Europe’s largest
digital agency”.

In a deal worth around £100m, the two companies will come together “to
offer clients digital marketing, consulting and technology services
wherever they operate, all under one roof.”

Bigmouthmedia brings cash to the table, following an EU40m private placement to The Carlyle Group, Cyrte and Janivo. Having attracted this investment, Bigmouthmedia and the EU40m were packaged into a holding company called Obtineo. And Obtineo today merged with LBi.

The merger is effectively a reverse takeover of Bigmouthmedia by LBi, which will remain the dominant shareholder with a 51% stake in the enlarged company.

The investors in Obtineo will own 24% of the new firm, with the former Bigmouthmedia shareholders retaining 25%.

The new agency will have around 1,800 staff, and offices in 15 countries.

Bigmouthmedia CEO Mark Bole said:

“For the past 18 months both bigmouthmedia and LBi have seen a real shift in client sentiment in regards to agencies: clients are increasingly looking for best in class agencies with the capability to cover all aspects of the digital universe – integrating search and digital media with creative and technology supported by strong transparent measurement – and the combined expertise of both companies will put us in a strong position to meet this demand.”

LBi CEO Luke Taylor said:

“This is a transformational deal in a growing market. It solidifies our position as the European leader and enables us to strengthen our reach in the US, Asia and MENA. We are now well placed to take advantage of the irreversible spending shift to online channels.”

We’ll be talking to the new company once the dust has settled to get the inside track. There’s more information from Andrew Girdwood on the Bigmouthmedia blog, and a summary of the financials can be found here.

It appears to be a big deal that makes sense, as far as I can tell, and I personally feel that this may mark the start of a wave of consolidation in agencyland. Your thoughts?