C3 Finds True North in Consolidation

Canadian marketing services firm True North Corporation and C3 Online Marketing, which is also based North of the border, have agreed to consolidate into one company. The merger strengthens the position of the two firms, who expect to see industry-wide consolidation in the digital marketing space.

“Online is growing rapidly; below the line is still growing; the next generation of interactive agency will be expected to have expertise in both online and offline strategies,” said Mark Anthony, president and CEO at True North. “We are already seeing larger marketing services organizations diversify their holdings to include marketing technology.”

True North and C3 both currently work with major brands in automotive, manufacturing and sports and entertainment sectors. Clients of the two companies include Ford, Coke, Novopharm, Oxford Properties, Maple Leaf Sports and Entertainment, Loblaws and the NBA.

Prior to the merger, True North focused on traditional marketing communications services while C3 operated as an online marketing service. To better position itself in the market, the new company will bridge multiple media channels. “The combined business will be able to deliver seamless integration of offline and online marketing programs,” said Anthony.

The all-stock deal will occur through a share exchange. A pre-closing estimate states that True North shareholders will own 60 percent of shares, and C3 shareholders will hold 40 percent on a post-closing, fully-diluted basis. The management and board of both companies are likely to carry on with their duties once the deal is completed. It’s expected to close by the end of June.

Quorum Funding Corporation is an investor in both companies. True North is publicly traded on the TSX Venture Exchange in Toronto under the ticker symbol “TN.” C3 is currently privately held.

“Quorum is a long-term player,” said Anthony. “True North is public currently and intends on remaining public. We see this as a huge value enhancer for shareholders.”

Anthony was unable to confirm what name the new entity will operate under after the deal closes.

Whether or not the digital marketing services industry in North America experiences a roll-up-style consolidation as True North and C3 expect, Anthony sees value in the current merger.

“We believe the upside will be in building the market-leading digital marketing services firm,” he said.

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