January 7, 2021 EvolveMKD would consider first marketing agency buys, CEO says by Deborah Balshem EvolveMKD, a New York City-based public relations and digital marketing agency, is opportunistically looking at acquisitions as the company scales, according to sole owner and CEO Megan Driscoll. Last year was EvolveMKD’s best year ever, despite the coronavirus pandemic. The company generated revenue of USD 18.5m in 2020, compared with USD 10m in 2019 and USD 6m in 2018, Driscoll said. EvolveMKD is profitable and debt-free, with projected sales of around USD 25m this year. Founded in 2014 by Driscoll, EvolveMKD has grown 100% organically to date. The company caters to the health, beauty and lifestyle markets. Driscoll said she might consider selling a minority stake to fund a large buy but is not likely to seriously evaluate a full sale for at least five years. The 40-year-old executive said EvolveMKD has been receiving increasing interest over the past six to eight months, especially from private equity firms with platforms in the sector. However, Driscoll said she sees an opportunity to grow and potentially acquire, with the COVID-19 pandemic bringing more sellers to market and accelerating the trend of baby boomer owners seeking to retire. Since EvolveMKD has many clients in Southern California, acquiring a smaller agency there could be highly strategic, Driscoll said. She did caution, however, that potential tax changes in the state might make that scenario less attractive. Last year, EvolveMKD added campaign measurement and analytics to its services portfolio, so it could also target agencies in that arena, Driscoll said. The company is expanding into tangential aesthetics spaces including eyecare, oral care, dental, weight loss, nutrition, cannabis and women’s health, so agencies focused on those sectors are attractive as well. EvolveMKD recently signed contracts with Allergan, the maker of Botox, and a division of AbbVie [NYSE:ABBV], and soft contact lens manufacturer CooperVision, Driscoll noted. Other clients include HydraFacial; Endo Aesthetics, a division of Endo International [NASDAQ:ENDP]; and Integrated Genetics, a division of LabCorp [NYSE:LH]. EvolveMKD’s services include PR, digital media, communications, social media, and research and analytics. According to Driscoll, multiples in the space range from 1x to 3x revenue. They can be higher when the agency has a strong focus on analytics. EvolveMKD has about 15 clients, ranging from startups to multi-billion-dollar market cap companies, Driscoll said. Most business comes from the US, though the company does some work in the UK, Spain, Taiwan and South Korea. Driscoll attributes the firm’s success in 2020 to several factors, including its focus on "cash-pay" industries, whose customers tend to have higher household incomes; a significant increase in digital business; and “a hyper focus on over-servicing our clients,” with senior people involved with all accounts. “It’s a great time to be an independently owned business, as we are able to take more risk, as opposed to the large agencies, which are somewhat constrained on pricing,” Driscoll said. “Many clients are now expecting more from their budgets and the math sometimes does not work out for the larger players.” Though EvolveMKD sometimes runs into big firms such as Edelman, Weber Shandwick and Ketchum, the company more directly competes in its sectors with Lippe Taylor and Marina Maher Communications, a division of Omnicom [NYSE:OMC], she said. EvolveMKD has approximately 28 employees. The company uses law firms Akerman and McCue Sussmane Zapfel & Cohen, and accounting firm GrowthLab Financial. ----------------- Mergermarket (mergermarket.com) is the leading provider of forward-looking M&A intelligence and data to investment banks, private equity firms, lenders, law firms, accounting firms and corporates around the world. Our parent, ION Group, is the largest global provider of trading, analytics and risk management solutions for capital markets.