Private equity firms Berggruen Holdings and Sleeping Bear Capital have bought a majority stake in Los Angeles hybrid creative agency/consultancy Phenomenon.
“This is a first-of-its-kind partnership between Berggruen and Sleeping Bear Capital to leverage a platform like Phenomenon as a revolutionary and creative business model focused on action, not just ads,” Phenomenon CEO and founder Krishnan Menon said in a statement. “We believe we’ve cracked the code on the ‘agency of the future’ through our seamless integration of communications, creative, design, product development and brand strategy.”
Financial terms of the deal were not disclosed.
Founded as an independent agency in 2006 by Menon, who was formerly chief strategy officer at DDB, Phenomenon has grown to count Warner Bros., American Express, Procter & Gamble, Crate&Barrel, Aetna, HP and the American Cancer Society among its clients.
“We are excited to be partnering with Phenomenon to build the next generation change-management platform,” Berggruen chief investment officer Koonal Gandhi said in a statement. “As long-term private equity investors, we believe that the need for brand-transformation services is more critical than ever before. We plan to use Phenomenon’s unique platform as the base of several acquisitions to come.”
“Phenomenon is one of the very few companies we’ve come across that has the creativity and tools to authentically and powerfully transform the brands of tomorrow,” added Sleeping Bear Capital managing partner Ranvir Gujral. “As established brands look to keep pace with culture and as new challenger brands look to find their place in the world, Phenomenon’s caliber of integrated offerings will be in high demand.”
The majority investment follows a series of major changes at Phenomenon in recent months.
In April, Intuit ended its relationship with Phenomenon, which had served as its brand agency of record, leading to a round of layoffs at the agency. Intuit subsequently launched a global creative review, which is ongoing. Phenomenon’s work for Intuit included the first brand campaign for TurboTax, which launched with a 15-second Super Bowl ad.
Earlier this month, Phenomenon president Erica Hoholick parted ways with the agency as founder, with Menon stepping into a more active role in day-to-day leadership. Last year, Phenomenon hired Linda Knight from TBWAChiatDay Los Angeles as chief creative officer.