Japanese holding company Hakuhodo DY Holdings is continuing its North American buying spree with the acquisition of Sid Lee, a Canadian shop known for creating immersive digital experiences.
The purchase is the latest step by Michael Birkin, a former Omnicom Group vice chairman, to establish a globe-spanning operating unit of Hakuhodo known as kyu (pronounced "Q"). Over the past year, Birkin has added Red Peak Group, a marketing services firm; SYPartners a brand consultancy; and Digital Kitchen, a digital content shop, to Kyu’s roster. The idea is to bring together agencies that specialize in non-traditional marketing services to offer clients an alternative to current holding companies.
"Kyu is right for us in so many ways," said Jean-Francois Bouchard, Sid Lee CEO, in a statement announcing the sale. "We’ve always taken a broad view of and an exploratory approach toward creativity. With Michael at kyu’s helm, we can continue to push industry boundaries — which will also include geographic expansion."
"With the transaction, our goal is crystal-clear," he added. "We will build Sid Lee into a fully deployed global brand and network over the next decade.
Founded in 1993, Sid Lee has become known for work that spans digital and analog experiences. In 2011, it produced an Adidas app that could find the closest store selling a pair of shoes based on a picture. This year it created an app for NYC Service that makes it easier for New Yorkers to do volunteer work. In Cannes this year, the agency announced that it was partnering with Cirque du Soleil to launch a branded entertainment company.
Sid Lee clients include Absolut Vodka, Intel, Tiffany’s and Unilever. (The agency handles the Axe brand in Canada,)
In contrast to most holding companies, kyu emphasizes its intention to remain small. "Our aim is to create a collective of a limited number of industry leaders," Birkin told Campaign US following its June acquisition of Digital Kitchen.
"The kyu collective does not think of itself as a holding company" he said. "Traditional advertising is not the core of our endeavor, just one important aspect of what we will become."
Hakuhudo is the seventh-largest holding company in the world by revenue, but second in Japan only to Dentsu Aegis. Both companies have ramped up their American acquisitions in recent years.
Sid Lee currently employs about 500 people, with offices in Montreal, Toronto, New York, Amsterdam, Los Angeles and Paris. Terms of the deal were not disclosed. The entire leadership team will remain in place, according to a release.