by Herman Manson (@marklives) Avatar Investment Holdings, owned by Zibusiso Mkhwanazi and Veli Ngubane, is set to acquire a significant minority stake in M&C Saatchi’s South African agency network, which includes M&C Saatchi Abel (see recent story on management moves here), M&C Saatchi Connect, M&C Saatchi Africa, Dalmatian and Creative Spark. At the same time, M&C Saatchi PLC will acquire a 20% stake in the agency AVATAR from Avatar Investment Holdings.
Mkhwanazi and Ngubane launched AVATAR in January 2012 as a a full-service marketing agency with a digital core. The agency has grown at over 100% year-on-year for the past four financial years, according to Mkhwanazi. It employes 60 odd people and clients include SAA, Brand South Africa, Chevron Caltex, Fox Africa channel, National Geographic Africa, Unilever and AB InBev-SABMiller.
Mkhwanazi says he and Ngubane have always admired M&C Saatchi Abel and its founding partner Mike Abel, knowing they could learn a lot from the fast-growing agency, and were pleasantly surprised when they discovered Abel had a similar interest in their business. The two approached Abel mid-2016 to discuss the possibility of investing in the M&C Saatchi network’s local operations.
“We’ve been working towards our goal of building SA’s largest integrated communications group and this deal fast-tracks that process,” says Mkhwanazi.
Abel, who believes his group can contribute skills and experience to AVATAR’s high-growth strategy, reiterates the importance of investing in transformation in the local advertising industry.
Exchange of resources
The deal will allow for collaboration and an exchange of resources between AVATAR and M&C Saatchi PLC’s SA agencies, while allowing the former to retain its independence, its majority-black shareholding and its level-one BBBEE rating. Appointments will be made to both boards, while Mkhwanazi insists AVATAR’s board will continue to reflect its majority black shareholding and that the agency remains committed to industry transformation.
AVATAR will house some conflict work from M&C Saatchi Abel and vice versa. It will also be taking space in the M&C Saatchi Abel campus in Houghton, Johannesburg.
Herman Manson (@marklives) is the founder and editor of MarkLives.com. He was the founding editor of media.toolbox (1998–2006) and Mobile.Works, and the co-founder of Brand magazine. He has served on the editorial boards of The Journal for Convergence, as well as of Fast Company South Africa. Winner of the 2011 Vodacom Social Media Journalist of the Year award, he was also a finalist twice in the Highway Africa Award for the Innovative Use of New Media in Africa (2003 and 2004). Over his 20-year-plus career, Herman has contributed to numerous journals and websites in South Africa and abroad, including the Mail & Guardian, .net, Intelligence, AdVantage, Men’s Health, Computer World and African Communications. He has consulted on web architecture to several financial institutions.