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The sale of M+C Saatchi ANZ to local management is part of the global advertising group’s efforts to simplify a business suffering from negative revenue growth.
This is all about, from the perspective the London-based business, cleaning up the bottom line financials while still being able to offer a global service to big brand names.
The company, now without a CEO and being run by the chair, Heather Rabbatts, was faced with an Australian arm so in the red that it was dragging down the whole.
Australia ended the 2025 year down 31.9%. Global like-for-like net revenue fell 7.3% to £204.7 million and operating profit was down 26.1% to £24.9 million. Without Australia, global revenue would have been down just 3.1%.
In a briefing of analysts in April, to discuss full year 2025 results, CFO Simon Fuller foreshadowed switching some regional businesses to locally-owned.
The thinking was that the London-based company could license the name, M+C Saatchi, to local management and still maintain a global presence but without the impact on the bottom line.
“We continue to think about what is the most effective way to operate in all of our regions, including Australia,” he said in response to a question from an investment bank analyst.
“For some regions we've decided that's a license. In other regions, we've decided that's an owned business. You could reasonably conclude we will do that. We'll continue to think about that for all of our network.”
The handing over of Australia is part of a long running strategy. M&C Saatchi has also closed, wound down or sold to local executives in Sweden, China, Hong Kong, Indonesia and Singapore.
So far, M+C Saatchi hasn’t released financial details of the local management buyout headed by CEO Dani Bassil and her senior executive team.
The fact that M+C hasn’t made a disclosure to the London exchange indicates that the transaction doesn’t meet the necessary reporting level of a major new development or material change in the company's financial condition.
That indicates that the price paid to London in the management buyout isn’t significant to the balance sheet.
The price would depend on the level of liabilities taken on by the management team.
But certainly some form of significant financing was needed for the deal, which is funded by growth investment firm Parc. It’s not known whether this was to pay M+C in London or to cover liabilities and working capital
When M+C’s South Africa business was sold, the company’s shares were acquired in 2024 by the local leadership team for £5.6 million (then valued at AUD10.7 million) cash.
The local executive team, led by Bassil, has, according to London, already done most of the restructuring of the Australian operations.
“In terms of Australia, what have we done? … we restructured the business,” said executive chair Heather Rabbatts.
“That was a real end-to-end review of how the business operates in the marketplace. It did involve moving offices. It did involve quite a big rethink around how we structured colleagues to do work.
“That restructure was completed in the second half of last year.”
The cost savings are in place. “While there is still work to do, we are closer to a simplified structure,” Dame Heather said.
However, last month M&C Saatchi made at least 20 roles redundant in Australia, following the agency's loss of major clients.
"This is never an easy outcome, particularly given the talented people who have contributed so much to our agency, our culture, and our clients' success," Bassil said then.
In London, the restructuring continues. In a trading update for the company’s AGM, Dame Heather said she was pleased with the progress that the business has made despite volatile global macro and geopolitical situation.
“We continue to target net revenue and operating margin growth this year, supported by the momentum in our high-margin specialisms,” she said.
“Our focus remains, as I highlighted when I took the role, on simplifying the business, refining our go-to-market offering and unlocking the Company's intrinsic value to deliver strong sustainable returns for shareholders, including through our ongoing share buyback program."
In Australia, Bassil said the buyout would allow the locally-led management team to focus entirely on the opportunities ahead.
"We have outstanding client relationships and a team of exceptional creative talent across Australia and New Zealand. The transaction will allow the locally-led management team to focus entirely on the opportunities in front of us and to shape our future with speed and ambition," she said.
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