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Rightpoint acquires Agency Oasis

The digital agency mergers + acquisitions space is an insatiable creature. Last week, Chicago-based technology and design firm, Rightpoint, bought out Boston-based full service digital agency, Agency Oasis. Terms of the deal were not disclosed but the acquisition was funded with a $55 million investment captured in May 2015 from New York-based private equity firm Stella Point Capital.

rightpointRightpoint, founded in 2007, offers management consulting, IT consulting, and creative agency services to help clients shape and implement digital strategies surrounding content management, e-commerce, and CRM technologies. Rightpoint is a Sitecore platinum partner, an EPiServer solution partner, and works regularly with Salesforce and SharePoint. The company has offices in Chicago, Denver, and Detroit and employs around 200 people.

Agency Oasis

Agency Oasis is a Boston-based firm with additional offices in Atlanta, Dallas, Los Angeles, NewYork, and San Francisco and employs around 100 people. The company is a full service digital agency that blends strategy, technology, and creative practices for customer success. Agency Oasis is a Sitecore platinum partner, with more than 75 developers on staff. The company also has experience working with platforms in CRM, DAM, e-commerce, marketing automation, and search.

With this acquisition, Rightpoint is charting a course to become a national player while still retaining its independence and agility. According to the Boston Globe, the two companies expect a combined 2016 revenue of $65 million. The acquisition aligns with Rightpoint’s accelerated growth strategy, which includes expanding its national presence, growing capabilities in key areas including digital marketing, e-commerce and CRM, and augmenting professional services with product-based solutions. Rightpoint has said there is still further seed money left over to augment their mobile app capabilities, or possibly acquire an agency specializing in Salesforce implementations.

What are the implications?

Holding companies like WPP, Publicis, Omnicom, Dentsu Aegis, and even collectives such as KLU have been acquiring smaller service providers – digital agencies and systems integrators – left, right, and centre. Small and mid-sized service providers (around the $10million – $50 million range) are being snapped up for a number of reasons, some of which are for strengths in:

  • geographical regions (i.e. strong presence in Japan, or North East United States)
  • technical capabilities (i.e. app development, Salesforce expertise, etc.)
  • business processes (i.e. consulting services, program management, etc.)
  • creative abilities (user research, marketing, branding, etc.)

It is rare for a firm of Rightpoint’s size to acquire a smaller service provider. While the giants in the service provider world (i.e. IBM, or Publicis and Omnicom subsidiaries) are continually augmenting services and skills through acquisitions, there is considerably less M&A  action in the mid-size range of service providers (i.e. those companies under the $50million revenue mark.)

Just last week, UK service provider Curve Agency (less than 20 employees) was acquired by CTI Digital, and prior to that, IBM acquired Bluewolf (over 500 employees), the largest Salesforce agency partner. While neither of these acquisitions can be compared on the basis of size or revenue, they are significant in that each demonstrates the market is continually moving within each size segment of the service provider landscape.

On the surface, it seems like Agency Oasis will be a good fit for Rightpoint. The two firms have similar business philosophies, both combining creative thought and technical expertise to solve client problems in the realm of customer experience. With the acquisition, Rightpoint is better positioned to serve national-level clients, with increased project complexities and business problems without sacrificing independence. Service providers of this size and function are rare in the digital agency landscape. For buyers, this is good news. It means buyers don’t have to choose between local or niche shops and the larger holding company type agencies (who often come with more scale but larger price points.) Rightpoint brings a third option to the table: offering end-to-end digital services on a manageable scale and perhaps at a more manageable price point, increasing options for buyers who are looking for something in the middle.



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