Phoenix sells Karmarama to Accenture

Kenny Wastell
30 November 2016

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Phoenix Equity Partners has sold UK marketing agency Karmarama to US professional services company Accenture.

Since Phoenix's investment, the company has undertaken an acquisitive growth strategy, bolting on The Crayon Group – a software, marketing and market research company – in 2012, social media agency Grape Digital in 2013 and mobile app specialist Nice Agency in 2014.

The company's existing management team will continue at the helm of Karmarama following the deal and take on additional roles across Accenture's marketing divisions.

The sale is Phoenix's third exit of the year, having generated a 4.3x money multiple on the £163m sale of Palletways to Imperial and divested technical inspection business Edif to Vei Capital-backed Rina for £118.5m.

The transaction marks the latest in a string of marketing agency acquisitions by Accenture, which most recently acquired a majority stake in Japanese digital agency IMJ Corporation.

Previous funding
Phoenix invested an undisclosed sum in the management buyout of Karmarama in June 2011. At the time unquote" reported the deal to be worth tens of millions of pounds, with significant capital earmarked for add-on acquisitions. Equity for the transaction was provided by the Phoenix Equity Partners 2010 fund, which raised £450m at final close in May 2010.

Company
Founded in 2000 and headquartered in London, Karmarama is an advertising agency. The business has a headcount of 250, an increase of 200% over the past five years. Its clients include the BBC, Confused.com, Deutsche Bank, Sky, Honda, Just Eat and Unilever.

According to publicly available records, Karmarama generated a turnover of £28.1m in 2015 with EBITDA before non-recurring expenses of £1.7m, up from £8.3m and £355,000 respectively year-on-year.

People
Phoenix – Mark Sargeant (investment director).
Karmarama – Jon Wilkins (executive chairperson); Ben Bilboul (CEO); Sid McGrath (chief strategy officer); Nik Studzinski (chief creative officer).