AIH, the owner of largest majority black owned and run integrated advertising group AVATAR360 (Avatar Johannesburg and Avatar Cape Town), will acquire shares in M&C Saatchi Abel, M&C Saatchi Africa, and three M&C Saatchi companies namely digital agency, Creative Spark, media agency M&C Saatchi Connect, and the design focused agency Dalmatian Advertising. In turn, the London-headquartered global marketing firm, M&C Saatchi PLC, will acquire a minority share in AVATAR360.

Awarded the Financial Mail Adfocus Medium Advertising Agency of the Year award at the end of 2016, AVATAR’s client list includes Caltex, Fox International channels, SAA, BrandSA, SAB, and Unilever amongst others. Founded by Zibusiso Mkhwanazi and Veli Ngubane in February 2012, Mkhwanazi and Ngubane will retain the majority shares of AVATAR, thereby making the share swop a first on the South African agency landscape, as it is the first time that a company of AVATAR’s size and structure will become part of another entity without sacrificing its independence.

“The share transaction we’ve concluded with M&C Saatchi Abel is a step we’re taking in order to continue driving our goal to establish South Africa’s largest integrated communications group – a dream we‘ve had since we founded AVATAR five years ago. Taking a share in M&C Saatchi’s local operations will benefit our deal flow and open solid African expansion opportunities,” says Mkhwanazi, CEO of AVATAR.

Mkhwanazi adds, “In return, AIH is a value adding shareholder. We have an extremely diverse and skilled team with a unique understanding of South Africa’s mass market. We have a solid track record, business and scale to raise capital and, as a result, we will also be making further investments in other locally owned agencies in the advertising industry in the near future.”

AVATAR has grown at a rate of some 100% year-on-year for the past four financial years, which means that they are outpacing the average agency growth rate for this market and growing market share.

“Our thinking now is to be Africa-facing, and we’ve been looking for the right structure and partners to take on the continent,” Mkhwanazi says. “We’ve had an interest in Mike Abel and his business for some time because of who he is, his values, amazing growth track record, and what he has achieved by gathering a remarkable group of people around him. Given our shared values and fit, the share deal made sense. It will enable us to access highly specialised resources, given the extended group will now number over 300 talented people. We will also now be able to tap into M&C Saatchi Worldwide, which is very attractive to us and existing clients in the AIH stable.”

"What Zibusiso and Veli have built during a few short years is remarkable,” says Mike Abel, founder and CEO of M&C Saatchi Group (Africa). “I was intrigued when they first approached me to invest in our company but having spent lots of time together, now I have come to appreciate that not only is AVATAR a great and talented bunch of people, but I believe our involvement in one another’s companies will create a much richer offering to the market, to our clients and to our people.”

All businesses will remain independent at board and executive level, but Mkhwanazi will become the group CEO of Avatar360 Group and AIH as of February, and is now tasked with focusing on expanding the group structure and positioning, as well as the integration between the agencies and overseeing shared services. Mthunzi Plaatjie who joined the group as MD of Cape Town will now oversee AVATAR’s Cape Town and Durban-based clients.

“AVATAR is still 100% black owned at a holding level and over 80% black owned at group level which means the advertising agency remains a Level One BBBEE communications partner,” says Mkhwanazi. “We’ve built our success by being a challenger agency, by being agile, and for creative, an agency with digital at its core but that foremost has a key understanding of South Africa’s diverse mass market. For us, nothing changes; we’ve simply taken our business up a notch to become one of the bigger players so that our voice becomes louder in contributing to the transformation agenda in our country.”

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