Vision7 owner Blue Focus to spin off global agencies

A new company called Blue Impact will absorb Vision7 and expand its model to agencies across the globe.

Cossette office 4

Legacy Acquisition Corp. will acquire businesses owned by Blue Focus, the Chinese holding company that counts Vision7 among its holdings.

As part of the agreement announced Friday, Legacy Acquisition (which was started by P&G veterans looking to pursue growth opportunities in the advertising sector) will acquire all issued and outstanding shares of a Blue Focus subsidiary that has been spun off to hold its global advertising and marketing services companies. Legacy Acquisition will be known as Blue Impact following the closing of the transaction. Blue Focus will continue to own its domestic agencies serving the Chinese market, and remain a shareholder in Blue Impact.

Among Blue Impact’s business will be all of Vision7, which includes Cossette, The Camps Collective (Camp Jefferson and Camp Pacific), Quebec creative agency K72, San Francisco agency Eleven (which Vision7 acquired last fall), Gene Global (which rebranded from Cossette Health earlier this year), PR agencies Citizen Relations and The Colony Project, experiential agency The Narrative Group and Vision7 Media (which includes agencies Cossette Media, Impact Research, Jungle and Magnet).

Further to that, Vision7 will cease to exist as a holding company following the closing of the acquisition, lowering the walls between it and other businesses owned by Blue Focus under the Blue Impact banner. Other Blue Focus holdings that will be part of Blue Impact include global agency We Are Social, San Francisco-based product design agency Fuseproject, Hong Kong-based full service agency Metta and Shanghai mobile media agency Madhouse.

Legacy Acquisition Corp. is a special purpose acquisition company, a type of public company that uses an IPO to raise funds for a future acquisition. Legacy was formed in Nov. 2017, specifically seeking the acquisition of a North American-based “consumer and brand based business,” according to its website. It was founded by Edwin Rigaud, a 36-year veteran of P&G and former VP of its food and beverage division, with Darryl McCall, who spent nearly 38 years with P&G and was its VP of product supply. They are supported by an advisory council that includes a number of other former P&G execs.

Blue Impact is also expected to have $176 million of cash available for working capital and further acquisitions after the deal closes, according to today’s announcement, which is expected to take place sometime this year, pending standard approvals and closing conditions. Blue Impact will serve over 3,000 clients across North America, Europe and Asia-Pacific, with over 2,500 employees.

The new entity will be led by Vision7 CEO Brett Marchand, who will become CEO of Blue Impact, along with chairwoman Holly Zheng, who is a director of Blue Focus, chairwoman of its International Business Management Committee and president of its international business. Marchand says a public CFO and an executive team will be announced in the future, but an investor presentation stated that among the management team would be Cossette president and CEO Melanie Dunn (responsible for owned media in Canada), Citizen Relations president Nick Cowling (responsible for earned media globally) and Vision7 Media president and CEO Joseph Leon (responsible for paid media in North American and EMEA).

Marchand says Vision7′s Canadian agencies will likely be the least impacted by the acquisition, as the biggest change across Blue Impact will be that the campus model Vision7 has established in Canada (with a lead agency surrounded by other service offerings and areas of expertise) is being tapped as the model pursued for the rest of the new company. Vision7 has campuses in Toronto, Montreal, London and Beijing, and expects to establish more in Los Angeles, New York, San Francisco and Shanghai.

“There’s a reason why I’ve been picked to be CEO that has less to do with me as a leader and more to do with the success of Vision7 in Canada, frankly,” Marchand says. “Having very clear swim lanes, lots of investment to make sure we’re fundamentally digital but have exceptionally strong creative and strategy and then putting them together in a way that they can collaborate. That’s going to be the model for the other places around the world.”

Vision7 had been pursuing growth of its campus model outside of Canada, which Marchand says Blue Impact will continue to do.

“Those expansion plans were being done under the same growth strategy we currently have,” he says. “We will continue the expansion strategy, but we’ll do it at the Blue Impact level, instead of the Vision7 level.”

In the announcement, Legacy said 63% of revenues from Blue Impact companies are derived from digital marketing activities, which it says makes it “well-positioned” to compete for assignments from “disruptor advertisers” like Amazon, Netflix, Beats, Casper and Google. In an investors call, Marchand said 44% of revenue came blue chip clients, with 37% of its revenue coming from disruptors, driven by digital, social and performance media.

Blue Impact will also pursue a “marketing as a service” model, something Vision7 agencies have pursued within Canada. Marchand says that in the current model, clients fund production and media costs, use their own or third party data to target, and they decide on content and creative – which he says is profitable and earns the company “around 20% margin.” But the “marketing as a service” model leverages AI and talent to optimize output, with charges based on outcomes – such as new subscription or new sale – and drives “around four times” higher margins, while saving clients money through a lower cost per acquisition.

With files from Bree Rody-Mantha.