WME Acquires Minority Stake in Ad Agency Droga5

The strategic partnership is WME's latest move in boosting its new media and marketing influence.

WME has acquired a minority stake in the ad agency Droga5, The Hollywood Reporter has learned. Neither party has disclosed terms of the deal.

Founded in 2006, the New York-based Droga5 has quickly become an industry leader. This year Fast Company named it one of the World’s Most Innovative Companies, it was Adweek’s U.S. Agency of the Year in 2012 and Advertising Age has rated it an A-List Agency for the past three years. Its clients include Prudential, American Express, Coca-Cola, Spotify, PUMA, Kraft Foods, Hennessy, Unilever, Qantas and the United Nations.

“Droga5 is best-in-class across the board — from its management to its creative output,” WME co-CEOs Patrick Whitesell and Ari Emanuel said in a statement. “Through this investment, we will be able to join the best artists and storytellers from all verticals, and we look forward to creating new opportunities for our collective clients.”

Droga5 has been especially strong in digital strategies. Last year it launched the technology development studio DE-DE, whose first product, the mass tweet application Thunderclap, won the first-ever Innovation Lion at the Cannes Lions International Festival of Creativity and was named “the future of social empowerment” by Forbes. The agency fielded interest from many potential buyers but ultimately selected WME for its “unrivaled resources and relationships” in entertainment and its growing portfolio of technology, media and marketing assets, a joint statement released by both agencies read.

“Droga5 has always endeavored to be the most influential creative agency in the business, with ideas that move our clients and our industry forward,” Droga5 founder and creative chair David Droga said in a statement. “This partnership will exponentially accelerate our ability to realize that ambition.”

Ever since WME sold a stake in its company last year to Silver Lake, a heavy investor in technology, the agency has made a number of investments in digital companies, including TheAudience, Red Interactive, Chaotic Moon and OpenSky.

Droga5’s management and operations will remain unchanged. Kirkland & Ellis LLP and Australia’s Clayton Utz advised the ad agency, while WME was advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP in the U.S. and Corrs Chamber Westgarth in Australia.