CJRW, one of the state's oldest and largest advertising and public relations firms, has acquired Heathcott Associates after more than a year of negotiations.
Terms of the deal were not disclosed. CJRW Chairman and CEO Wayne Woods and Heathcott Associates owner Gary Heathcott announced the transaction Saturday. The former competitors had been discussing a possible merger since late 2013, and both said they used the time to evaluate each other not just financially, but philosophically.
"We were looking for growth, and our personalities fit," Woods said. "We like each other personally and professionally. Gary has beaten us in pitches over the years and we've beaten him, but it was never a bad-taste thing. ... In this business, you win and lose."
CJRW was formerly known as Cranford Johnson Robinson Woods. The agency was founded in 1961. With the acquisition, CJRW will have more than 80 employees.
"In this business when you're through changing, you're through," Woods said. "You've got to evolve every day, every week, every month. The challenges some of our clients have are tremendous, and they expect us to help them solve them. If we can make them successful, then we've done good. Gary has been able to do that and so have we."
Heathcott has been in public relations for 41 years and as part of the acquisition terms will serve as a consultant with CJRW. As part of the deal, eight "key" Heathcott Associates employees will join CJRW, which had 74 employees before the deal.
Clients including the Arkansas State Fair, Honda Motor Company in Arkansas and Louisiana, electric co-ops in multiple states and government contracts such as the Chemical Stockpile Emergency Preparedness Program will transfer over from Heathcott Associates to CJRW.
"I look forward to getting out of the day-to-day operations and being able to focus on the clients we represent and bringing in new business and helping the growth that [CJRW is] so focused on for the future," Heathcott said. "They're the largest firm in Arkansas and have been for as long as I've been in business. To be affiliated with somebody like that was extremely appealing."
CJRW President Darin Gray said the acquisition of Heathcott Associates was part of a growth strategy implemented when he joined the firm in February 2014. Gray and CJRW leadership have been evaluating acquisitions opportunities while working to increase services with existing clients and recruit new business.
Gray said CJRW was looking for growth in Northwest Arkansas among clients in the shopper marketing and consumer packaged goods industries. Recently the company has added United Bilt Homes, Cornerstone Pharmacy Clinics and NanoMech Technology as clients, with "six or seven" possible accounts currently under negotiation.
"This [acquisition] is the third leg of that stool that allows us to grow exponentially in diversified areas," Gray said. "This is all part of the overall strategic plan that we set in motion almost a year ago. Sometimes it just takes a while to work through all the details. You sometimes date a little while before you get married to make sure it's the right fit."
The acquisition of Heathcott Associates comes during a tumultuous two-year period for CJRW. More than 40 employees have left since January 2013, and the firm learned late last year that Tyson Foods was moving its marketing out of state.
Among the high-profile departures were Jordan Johnson, senior vice president of public policy; Stacy Sells, senior vice president for strategic planning; Denver Peacock, senior vice president of public affairs; Luis Gonzalez, senior account executive; Ross Cranford, vice president of tourism services; Jay Cranford, senior vice president and creative officer; and Chris Cranford, vice president and creative director of Jones Film Video. The Cranfords are sons of CJRW founder Wayne Cranford. The brothers opened Cranford Co. in July 2014.
Along with the departures came the loss of clients, including the Clinton Presidential Center and William J. Clinton Foundation. Woods said lost accounts and employee turnover are to be expected in the profession, but he noted that the past two years have been "a challenge."
"We have dealt with some adversity that we wish we hadn't dealt with, but we have come through it," Woods said. "We have replaced almost all the people who left here with better people, more talented people. Good people. We don't want to look to the past. We're looking for the future."
Heathcott said the turnover and recent loss of a high-profile client like Tyson didn't discourage him from entering into a deal with CJRW. He felt comfortable with the direction of the company that he was asking his employees and clients to join.
"From the outside looking in, I think everything is very, very positive with the way this company looks today," Heathcott said.
Major CJRW clients include Centennial Bank, Riceland Foods, the University of Central Arkansas and the state Parks and Tourism Department, which is the firm's largest account. Gray said the state's Parks and Tourism board recently voted unanimously to allow CJRW to finish the final year of its current two-year contract.
Both Woods and Heathcott declined to discuss revenue figures for 2014. Gray said recently that CJRW was on pace for $9 million in revenue and that the company handled capitalized billings of about $67 million. Capitalized billings are an aggregate total of all measured business that passes through a particular agency and are an industry metric for judging agency size.
Part of the company's continued transition will include Gray moving to Little Rock. He's been commuting from Northwest Arkansas and will time his move with CJRW's relocation into offices in the Fulk Building at Third and Main streets in Little Rock. Jones Film Video, a subsidiary of CJRW, was also scheduled to move into a downtown location. CJRW will retain its office in Springdale.
"Some people have taken potshots, but I think you can see there's been a plan in place all along," Gray said. "Now it's starting to come to fruition."
A Section on 01/18/2015