GKV Communications Inc. said yesterday that it is absorbing a smaller Baltimore rival, the Campbell Group, in a deal that will create a 100-person advertising firm with more than $150 million in annual billings.
Once the deal is completed, the new company will operate under the GKV name. The Campbell Group will move from its Pratt Street offices into GKV headquarters at Tide Point, the renovated Procter & Gamble plant in Locust Point, by Jan. 1. Terms weren't disclosed.
Roger L. Gray, GKV's president and chief executive officer, will be chairman and CEO of the new company. Brian Hall, a partner and account director at Campbell, will be second-in-charge as president and chief operating officer. Ten employees are expected to be laid off.
Hall and Gray said they first considered merging several years ago after attorney Jim Astrachan, who represented both companies, said they would be a good fit. At the time, the companies had competing clients: Campbell represented InterContinental Hotels & Resorts and GKV represented Choice Hotels. GKV lost its hotel account in 2002.
After having coffee at Greenspring Station four months ago, Gray and Hall decided to revisit the idea.
"When we look at our needs and strengths it really fits together nicely," Hall said in an interview at GKV's offices yesterday. "It's much less like a merger and more like a reunion."
Bob Campbell started the Campbell agency in 1984 in Alexandria, Va. He moved it four years later to Baltimore and ran the company until 1997, when he died at 49 of a heart attack. Hall and two partners then bought the company from Campbell's heirs.
GKV was created through several mergers beginning in the 1980s. It has been looking to expand its international contracts, a market in which Campbell has built expertise. Campbell represents the Puerto Rico Convention Bureau and markets many of InterContinental's overseas properties.
Also, the Campbell Group has built a niche in marketing via the Internet and other interactive marketing, something Gray hopes they'll bring to the new company.
Campbell has been looking to represent more banks and other companies in the financial services sector, where GKV is strong.
Gray said he sees room to cross-promote with the merger. For instance, GKV represents Independence Air, a start-up discount airline, and could promote packages with the InterContinental hotels that Campbell represents.
The two companies have found themselves competing for the same contracts. GKV beat out Campbell for the state's tourism account. A year ago the two companies presented similar proposals for an account for Music & Arts Centers Inc., a national company that rents and sells musical instruments to students. Both said they proposed selling the idea that bands aren't just for geeks. GKV won that account, too.
Gray said he was looking for ways to expand as his accounts outgrew the number of employees. In the past 18 months, GKV has picked up six accounts worth $38 million and is competing for four more worth $28 million, he said.
"We're bursting at the seams in terms of manpower," he said.
Many in the advertising community said the two companies will be a good match.
"GKV was formed out of many mergers," said Andy Malis, president of MGH Advertising Inc. in Owings Mills. "They know what to do when integrating different cultures. They're a bigger, more important agency now with the merger of two very important companies."