Bastion adds Banjo to repertoire

Bastion Collective has bought a majority stake in Banjo, creating one of the country’s biggest locally owned ad agencies.

Bastion chief executive Jack Watts and Banjo co-founder Andrew Varasdi. Picture: Britta Campion

Melbourne-based Bastion Collective has bought a majority stake in Sydney group Banjo, creating what management claims to be the country’s biggest locally owned independent advertising agency.

The sale comes just after Banjo celebrated its 10th year in business, with co-founders Andrew Varasdi and Ben Lyttle having started with the backing of prominent investor Mark Carnegie and advertising industry legend John Singleton in September 2008.

Mr Carnegie sold down his stake last year with Mr Singleton staying in as a silent partner with a 20 per cent share. The Banjo co-founders will maintain a minority stake and their brand, becoming the 10th business under the Bastion model that sees its owners take majority stakes in its founder-operated subsidiaries.

Jack Watts, Bastion’s chief executive, told The Australian the move was an attempt to combine aspects of the old Australian agencies that used to dominate the local scene with a modern way of doing business.

“There used to be the days when you had Australian agencies in the space that really drove the national agenda. They were household names. John Singleton and Harold Mitchell were legends,” Mr Watts said.

“But there has been a lot of sales to multinational companies so we have lost some of that. We want to create a new version of that, providing a bridge from the past to the present with the model we have. We think we are now one of the biggest, if not the biggest, independent Australian agency out there,” Mr Watts added.

Banjo, Mr Watts’s co-founder and brother Fergus Watts said, would complement and build on Bastion’s collection of businesses offering advertising, communications, public relations, corporate advisory, government relations and sponsorship services for clients such as AIA, Ferrari, Microsoft and Deakin University.

“Our strategy has been to create a significant agency within this country that can provide a fully integrated solution to clients through absolute specialists in owner-operated companies,” Mr Watts said.

“We are continually looking for agencies that complement what we do. We don’t acquire competing agencies or anything like that. What we were looking for was a high-end creative business based in Sydney. We looked at a lot of agencies and we are thrilled with Banjo.”

The move also comes as agencies face increasingly harder times in Australia, with WPP’s ASX-listed Australasian business last week revealing the underperformance of its creative agencies would result in it delivering a financial result below its previous guidance to the market.

Mr Varasdi said his clients included AMP, Alinta Energy, The Real Pet Food Company and the NSW government.

He admitted he had held talks with WPP about joining its group, but said they wanted to strip costs out of the business, reduce staff numbers and phase out the Banjo brand.

“What Bastion said to us was we want you to keep being Banjo, we don’t want you to lose a person. Keep operating and thinking the way you are,” Mr Varasdi said.

“We want to give you the chance to be better to have access to all the other things [Bastion] do. And for them to have access to us as well.

“It is tough being an independent on your own. You need a network. What Bastion brings is a network of clients, which is what we bring to them too — the possibility of clients asking for some of the services that they also provide.”

Jack Watts said the combined business would now have about 200 staff based in Australia, with another 30 in Los Angeles and a small office in China. He said the company, which last revealed in 2014 it had annual revenue of about $10 million, has been growing at a rate of about 30 per cent year on year.