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Lighthouse Global Network was shaping up as one of the world's fastest-growing independent marketing services groups by the end of the 1990s, but in July 2000, it took the fast track to a global profile, selling out to Cordiant Communications in a $590m all-share deal. The group added its broad portfolio of consultancy, PR and design businesses to Cordiant's own spread of advertising and marketing companies. Pre-deal, Advertising Age had ranked Lighthouse as the #24 ad organisation worldwide in 1999 with gross income of $160m on billings of $1.1bn.
Lighthouse's chairman-CEO Terence Graunke already had an impressive track record for building up and then selling on companies. A college drop-out, he set up integrated marketing company US Communications in 1979, turning it into a $100m business through the acquisition of direct marketing company Unispond 10 years later. The company was sold to Omnicom in 1991, and Graunke spent some time running Rapp Collins and DDB Focus for the marketing giant, before joining investment firm Hawthorne Group to develop various media-related projects.
One of these was a new start-up, SeaVision, which made interactive TVs for cruise ships. Graunke couldn't get enough content to broadcast, so set up sister company Eagle River Interactive to provide it. Eagle River was one of the pioneers in the exploding new media environment, and went public in 1996. With some of the proceeds, it acquired IT training company Mastering. The enlarged business expanded to seven US offices and a London outpost, before Graunke sold the web development operations in 1997, again to Omnicom (who subsequently merged it into Agency.com). Meanwhile Graunke kept hold of Mastering. By developing the company's sales promotion business, he grew its revenues from $10m to $50m in just two years. This business too was bought out, acquired in 1998 by Platinum Technology for around $225m.
That year, Graunke set up Lighthouse as a holding company for specialised marketing services agencies. With an acquisition fund of around $100m, he set out to purchase niche players looking for a broader market position. International Sports Marketing was the first target, acquired in 1998, followed by Fantastic Sports early in 1999. A key purchase was international design and branding group Fitch, bought in March 1999 for $52m. The group expanded rapidly, adding UK integrated marketing agency Communicator, US design agency Primo Angeli, event marketers Sports Pro Hawaii and strategic agency Davidson Marketing in just the next two months. Another cornerstone was leading UK financial PR company Financial Dynamics, acquired for $65m that August. A string of other agencies joined the group over the following year, with Graunke sealing 17 deals in just 19 months. In early 2000, the group began restructuring its diverse portfolio, with a number of the marketing services businesses including US agency Davidson combining under the name Communicator Worldwide.
Following acquisition by Cordiant in 2000, the various parts of Lighthouse were split out between the British group's operating divisions. Communicator was merged into Bates' integrated arm 141 Communications, while the design and PR agencies became the core of two new marketing services divisions within Cordiant: Fitch Worldwide and Business Communications International. Ironically, Lighthouse subsequently proved to be the undoing of Cordiant, and the British group eventually collapsed after struggling with mountainous debt and disastrous account defections. By this time, Graunke had moved on, forming private equity investment group Lake Capital. His subsequent projects have included DVC Worldwide, already one of the world's leading marketing organisations; financial consultancies Huron Consulting and Archstone; and Trailer Park Studios. In 2015, he negotiated the acquisition of UK marketing group Engine, parent to WCRS and other agencies, and is now its chairman.
Last full revision 17th November 2017
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