The Jupiter Drawing Room (South Africa) & Partners, Africa’s largest independent advertising agency group, announced yesterday, 29 January, a landmark partnership with media and communications giant WPP.

This coincides with WPP CEO Sir Martin Sorrell’s announcement of the deal in Davos, Switzerland earlier today.

In what Jupiter group Chairman Graham Warsop calls “A dream deal”, WPP will acquire, (subject to Competition Commission approval), a 49% stake in The Jupiter Drawing Room (South Africa) & Partners, The Jupiter Drawing Room (Johannesburg), The Jupiter Drawing Room (Cape Town) and through this investment, in their subsidiaries, including Black River FC and MetropolitanRepublic.

Jupiter is one of the top four South African advertising groups by revenue and boasts a blue chip client roster that includes ABSA, Edcon, MTN and Sasol in Johannesburg and Hyundai, Sanlam and Woolworths in Cape Town.

The Johannesburg agency was founded in 1989 with two employees and one client, the Cape Town office opened in 1994. In the nearly two decades of its existence as an independent, there has been significant sustained growth. As at end February 2008 group revenues were R235,7 million (estimated billings of R1,4 billion).

The attraction of The Jupiter Drawing Room for WPP rests in part on the business success of the group, but also on the stellar reputation The Jupiter Drawing Room has gained internationally for the quality of its strategic and creative output.

Jupiter is currently ranked as the number one creative agency group in South Africa by the SA Creative Circle and is the only South African agency to have been ranked in the Top Five Most Creative Agencies in The World by US trade publication Advertising Age.

The Jupiter WPP deal is noteworthy in two material respects:

1. WPP and Jupiter have agreed a 49% stake investment as opposed to the traditional international networks’ investment policy of acquiring majority equity.

2. In a stunning testament to the power of The Jupiter Drawing Room brand, it will retain its status as a stand-alone brand in the WPP family and will not be incorporated into a branded network.

“It is of supreme significance that WPP will position The Jupiter Drawing Room brand as a stand-alone in its stable, not incorporated into any existing WPP branded agency or network. This leaves the door open for the possibility of building The Jupiter Drawing Room brand as a micro-network, beyond Africa, in the future,” says Warsop

In 2006, in one of the industry’s most significant empowerment deals, investment partner MSG Afrika Investment Holdings led by CEO Given Mkhari, acquired majority equity in The Jupiter Drawing Room (Johannesburg).

According to Mkhari, who is Non-Executive Chairman of The Jupiter Drawing Room (Johannesburg), it was important that the sale facilitated a partial exit in the agency, whilst bolstering the company’s competitive edge.

Post the WPP deal completion, MSG Afrika will reduce its stake in the Jupiter Drawing Room (Johannesburg) to 25%. When added to chief strategy officer Haydn Townsend’s shareholding and 10% to be placed in the Black Staff Trust, BEE equity will be at 40% post the transaction (significantly ahead of the current industry score card targets). The balance of 11% remains in the hands of the founding partners and Alison Deeb MD.

MSG is only releasing its shareholding in The Jupiter Drawing Room (Johannesburg) agency.

Mkhari said: “A key feature of the transaction is the introduction of a Black Staff Trust which will own 10% of the Johannesburg agency. The staff trust is established to ensure the sustenance of the company’s impeccable BEE profile, with a strong broad based component, which remains way above the country’s legislative requirements.” Mkhari added: “The Black Staff Trust will further assist the company’s quest to attract and retain the most sought after black talent. All shareholders have contributed in the funding of the Black Staff Trust”.

As a result of the WPP transaction Jupiter shareholders will release their shareholding equity in local agency DDB (South Africa). (The DDB brand is owned by WPP rival Omnicom). Jupiter’s relationship with DDB (South Africa) proved beneficial to both parties, with Jupiter having access to a top international network and DDB (South Africa) enjoying a notable creative revival as part of the Jupiter family.

The WPP partnership will give The Jupiter Drawing Room clients access to one of the world’s largest and most admired media and communications groups, something not normally available to an independent agency’s clients.