Targeted Victory’s first acquisition since Stagwell Media LLC took a minority stake in the full-service GOP firm five years ago could set the stage for more conglomeration on the right.
That is, if firms can get their accounting in order. One stipulation of Targeted Victory’s deal with TMA Direct was that the data services company had to be “public-level accounting compliant” as it was joining a multi-billion-dollar publicly traded holding company (Stagwell Group LLC).
“I think people under-appreciate how hard it is to go through the months of diligence and all the work,” Zac Moffatt, Targeted Victory’s CEO, told C&E.
“I think it’s easy to talk about, but it’s quite hard to live. There’s nothing pleasant about it.”
Moffatt continued: “It’s hard to get your books there. It’s a testament to Mike and the team that they ran their company in a way that they could come in. I think for most people, that would actually be the hardest challenge to be purchased — just how all-encompassing it is in order for something like this to happen.”
Moffatt said his company is now focused on House and Senate campaigns, and the timing of the deal, which was announced June 2, could help clients with fundraising as the primary season ends and the midterm general election ramps up.
“I think this is the optimal time because billions of dollars will be raised in the coming 180 days and we believe our combined offerings will service a big chunk of that,” he said. “There are people who try to time these things and think about it. We’ve always been kind of working towards it. That’s the mentality.”
Moffatt also said his company is open to more acquisitions in order to remain competitive. “I think we’re always looking for whoever’s a best partner to potentially transition and just remove some of that natural friction that occurs. And that’s what a business deal is,” he said.
“The challenge is always: can both sides figure out a way to make it so everyone wins? And that’s not always the easiest thing to do.”
Still, he believes that this initial acquisition could help other companies make similar deals and improve the health of the industry overall.
“It’s part of the industry maturating,” he said. “These are things one must do for the whole market to get better. We have a fundamental belief that the space is still early in its maturation of how big it’s getting. I still think we’re in the 3rd or fourth inning.”
Mike Murray has seen the growth of the industry as he built up TMA Direct, whose services including database management and email marketing, over the past three decades. He said that others approaching the acquisition process “need to really be mentally prepared.”
He added: “They need to make sure that everything is in order on their end to attempt to get through a process like this.”
Part of the reason why Murray proceeded with the sale, after working closely with Moffat over the past decade in various capacities, is because he saw how challenging it would be to take his business to the next level on his own.
“While I built a very successful business, had good customers, in order for me to take that stuff to the next level, did I, where I’m at in my career, want to try to tackle that and make those investments myself, or was it more logical for me to integrate with a company like Targeted victory?”
The answer: integrate and take advantage of the larger firm’s infrastructure. Murray will now focus on sales and maintaining client relationships. He’s taken the title of political division chairman with Targeted Victory. Meanwhile, clients can now expect the “friction” and siloing that existed as they accessed services from the two companies separately to drop off.
“Mike had all these insights in one silo and we had all these insights in another silo,” Moffatt said. That deeper integration between the companies’ services, “that’s where I think they’ll be a big value add.
“What we have done here is we have just taken what the core assets of Targeted Victory are and expanded them by a massive amount.”