Filed by The Interpublic Group of Companies, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
deemed filed pursuant to Rule 14a-12 of the Securities
Exchange Act of 1934
Subject Company: True North Communications Inc.
Commission File No. 1-5029
THE FOLLOWING IS A SLIDE SHOW DISSEMINATED BY THE INTERPUBLIC GROUP OF
COMPANIES, INC. AND TRUE NORTH COMMUNICATIONS INC. ON MARCH 19, 2001
Slide Show 19 March 2001 The Interpublic Group of
Companies, Inc. [Logo]
The Interpublic Group of Companies, Inc.
The Interpublic Group
of Companies, Inc. [LOGO]
True North Communications, Inc.
[LOGO of True North Communications, Inc.]
================================================================================
Cautionary Statement
This document contains forward-looking statements. Statements that are not
historical fact, including statements about Interpublic's beliefs and
expectations constitute forward-looking statements. These statements are based
on current plans, estimates and projections, and therefore undue reliance should
not be placed on them. Forward-looking statements speak only as of the date
they are made, and Interpublic undertakes no obligation to update publicly any
of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties.
Interpublic cautions that a number of important factors could cause actual
results to differ materially from those contained in any forward-looking
statement. Such factors include, but are not limited to, those associated with
the effect of national and regional economic conditions, the ability of
Interpublic to attract new clients and retain existing clients, the financial
success of the clients of Interpublic, and developments from changes in the
regulatory and legal environment for advertising companies around the world, and
the successful completion and integration of acquisitions which complement and
expand Interpublic's business capabilities.
Another important factor is Interpublic's acquisition strategy. One of
Interpublic's business strategies is to acquire businesses that complement and
expand its current business capabilities. Accordingly, Interpublic is usually
engaged in evaluating potential acquisition candidates. Interpublic is
currently engaged in a number of preliminary discussions that may result in one
or more substantial acquisitions. These acquisition opportunities require
confidentiality and from time to time give rise to bidding scenarios that
require quick responses by Interpublic. Although there is uncertainty that any
of these discussions will result in definitive agreements or the completion of
any transactions, the announcement of any such transaction may lead to increased
volatility in the trading price of the shares of Interpublic.
Moreover, the success of recent or contemplated future acquisitions will depend
on the effective integration of newly-acquired businesses into Interpublic's
current activities. Important factors for integration include realization of
anticipated synergies and the ability to retain new personnel and clients.
Investors should evaluate any statement in light of these important factors.
The Interpublic Group of Companies, Inc. and True North Communications Inc.
will be filing a proxy statement/prospectus and other relevant documents
concerning the proposed transaction with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain the document free of
charge at the SEC's website (www.sec.gov/EDGAR), or at the SEC's public
reference room located at 450 Fifth St., NW, Washington, DC 20549. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
room. In addition, documents filed with the SEC by Interpublic and True North
may be obtained free of charge by contacting The Interpublic Group of Companies,
Inc., 1271 Avenue of the Americas, New York, NY 10020, Attn: Investor Relations
(tel: 212-399-8057), or the True North Communications, Inc. at 101 East Erie
St., Chicago, IL 60611, Attn: Corporate Communications (tel: 312-425-6500).
INVESTORS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION. True North and
certain other persons referred to below may be deemed to be participants in the
solicitation of proxies of True North's stockholders to approve and adopt the
merger agreement with Interpublic. The participants in this solicitation may
include the directors and executive officers of True North, who may have an
interest in the transaction as a result of holding shares or options of True
North. A detailed list of the names and interests of True North's directors and
executive officers, and of their ownership interests in True North, is contained
in True North's proxy statement for its 2000 Annual Meeting, which may be
obtained without charge at the SEC's website (www.sec.gov).
1
Introduction
================================================================================
- John Dooner
Chairman and Chief Executive Officer, The Interpublic Group
- Sean Orr
Chief Financial Officer, The Interpublic Group
- David Bell
Chairman and Chief Executive Officer, True North Communications
- Brendan Ryan
Chief Executive Officer, FCB Worldwide
2
Agenda
================================================================================
- Introduction
- Strategic Overview
- The True North Acquisition - Creation of A New Industry Landscape
- Transaction Summary and Financial Considerations
- Closing Remarks
Appendix
- Overview of The True North Business Units
3
================================================================================
Strategic Overview
4
Strategic Overview
================================================================================
Strongest Client Base
+
Broadest Array of Resources
+
Deepest Geographic Coverage
+
Client-Focused Management
[DOWN ARROW]
Category Leadership
5
Why A Third Network
================================================================================
Interpublic's long term success will be greatly enhanced by adding the right
-----
third network. It is expected that the right third network would ensure that
------
Interpublic would have:
- The most powerful client list in the business
- New and expanded marketing communications resources to service our clients
- An expanded portfolio of companies and management that will continue to
contribute to our accelerated growth.
6
Evaluation Criteria
================================================================================
This acquisition prospect was evaluated based on six specific criteria:
- Clients -- The quality of its client list, including the specific clients
and the depth of the relationship (# of countries represented)
- Management Strengths -- Experience level, track record and confidence in the
management team
- Financial Proposition -- Valuation is economically attractive and creates
value for IPG shareholders
- Accelerated Growth Potential -- Interpublic's ability to accelerate the
prospect's growth
- Agency Footprint -- How broad is their core agency coverage, majority
ownership, etc.
- Marketing Service Offering -- The number and quality of non-advertising
services offered
7
================================================================================
The True North Acquisition
Creation of A New Industry Landscape
8
Why True North?
================================================================================
- Great Clients
- Great People
- Attractive Valuation
9
New Industry Landscape
================================================================================
Outright leadership for the new Interpublic:
- In overall size
- In the number of marketing services where we rank #1
- In clients served in 20+ countries
- In the addition of a top-tier third network - FCB Worldwide
- In quality of management team
10
Largest Revenue Base in the Industry
================================================================================
Advertising Companies 2000 Pro Forma Revenue
[BAR GRAPH ILLUSTRATING DATA IN TABLE BELOW]
Interpublic [3] OMC [3] WPP [1] Havas [3] Publicis [2] Grey [3] Cordiant [3]
7.2 6.2 6.1 2.1 1.6 1.2 0.8
Based on reported 2000 revenue figures adjusted to reflect TNO with Interpublic.
Note [1] Source: WPP Group plc presentation, March 2001
[2] Includes 4 months of Saatchi & Saatchi Revenues
[3] Source: Company's 4th Quarter press release
11
Category Leadership
================================================================================
IPG Position
Total Revenue #1
Advertising Billings #1
Media Services #1
Healthcare #1
Meetings and Events #1
Sports Marketing #1
Branding & Corporate Identity #1
Sales Promotion (US) #2
Marketing Research #2
Public Relations #3
Direct/CRM #3
12
Great Clients
================================================================================
True North clients add breadth and depth to IPG roster
American Airlines Kraft/ General Foods
AT&T Merck
Bank of America Nortel
Beiersdorf Quaker
Bristol-Myers RJR/Nabisco
Chase Manhattan SC Johnson
Compaq Subaru
Coors Taco Bell
Datek US Postal Service
Glaxo Verizon
IPG penetration of top 25 US advertisers rises from 13 to 18
13
Quality Client Relationships
================================================================================
Number of Multinational Clients in 20+ Countries (Unduplicated for 2000)
[BAR GRAPH ILLUSTRATING DATA IN TABLE BELOW]
Interpublic WPP OMC Publicis Grey BCom3
40 31 31 18 9 7
Source: Ad Age Sept. 19, 2000
14
FCB Worldwide
================================================================================
- #11 global agency network - #4 in U.S.
- 210 offices in 96 countries
- 2000 billings: $8 billion+
- Strong client list
- AT&T, Beiersdorf, Chase, Compaq, Coors, Kraft General Foods, Merck,
Quaker, Samsung, SC Johnson, Taco Bell, USPS
- Excellent creative reputation
- Strong management team led by proven CEO Brendan Ryan
15
Great People
================================================================================
- Like-minded management team, with shared view of business, of importance of
delivering complete solutions to clients and focus on profitability
- Led by David Bell (TN Chairman & CEO) and Brendan Ryan (CEO of FCB)
- Supported by strong cadre of experienced, proven professionals:
- Harris Diamond - CEO BSMG
- Gene Bartley - CEO Bozell Group
- Val Zammit - CEO Diversified Companies
- Kelly O'Dea - President FCB Worldwide
- Harry Reid - President FCB International
- Dennis McClain - CEO Temerlin McClain
16
Transaction Summary
and
Financial Considerations
================================================================================
Transaction Summary
================================================================================
Transaction Structure: Stock for stock merger of Interpublic and True North
Exchange Ratio: Fixed exchange ratio of 1.14x shares of
Interpublic for each share of True North
Transaction Value: $40.24 per True North share based on Interpublic
closing price of $35.30
Approximately $2.1 billion equity value
Pro Forma Ownership: Interpublic 84.5%; True North 15.5%
Accounting Treatment: Pooling of interests accounting
Tax Treatment: Tax-free reorganization
Deal Protection: $80 million break-up fee
Board of Directors: David Bell and Brendan Ryan to be nominated
for election to Interpublic Board of Directors
Expected Closing Date: Mid-summer 2001
18
Financial Impact
================================================================================
- 2000 pro forma net revenues of $7.2 billion and pro
forma operating income of $1.0 billion
- Accretive to GAAP earnings in 2001 and 2002
- Annual cost savings quantified to date in excess of
$25 million
- Additional new growth opportunities not factored into the analysis
- Pro forma double digit revenue growth for 2001 (including Chrysler)
- 2001 pro forma EPS estimates of $1.65-$1.70, consistent with previous
guidance
- Continued commitment to annual double digit top line growth and double digit
EPS growth going forward
19
2000 Pro Forma Revenue by Region
================================================================================
Interpublic Interpublic + True North
Total $5,626 Total $7,154
[PIE CHART [PIE CHART
ILLUSTRATING DATA ILLUSTRATING DATA
IN TABLE BELOW] IN TABLE BELOW]
Australia/Asia Pacific - 11% Australia/Asia Pacific - 9%
Europe - 30% Europe - 26%
Latin America - 4% Latin America - 4%
North America - 55% North America - 59%
20
2000 Pro Forma Revenue by Region
=========================================================================================================
Interpublic + True North Omnicom [1] WPP and Y&R [2]
Total $7,154 Total $6,154 Total $6,100
[PIE CHART [PIE CHART [PIE CHART
ILLUSTRATING DATA ILLUSTRATING DATA ILLUSTRATING DATA
IN TABLE BELOW] IN TABLE BELOW] IN TABLE BELOW]
Australia/Asia Pacific - 9% Australia/Asia Pacific - 5% Australia/Asia Pacific - 10%
Latin America - 4% Latin America - 2% Latin America - 7%
UK and Europe - 26% UK and Europe - 36% UK and Europe - 38%
North America - 59% North America - 57% North America - 45%
WPP & Y&R revenue split between Latin America and Australia/Asia Pacific based
on IPG estimates
[1] Source: Company's 4th Quarter press release
[2] Source: WPP presentation, March 2001
21
2000 Pro Forma Revenue by Sector
================================================================================
Interpublic True North + Interpublic
Total $5,626 Total $7,154
[PIE CHART [PIE CHART
ILLUSTRATING DATA ILLUSTRATING DATA
IN TABLE BELOW] IN TABLE BELOW]
Advertising 46% Advertising 49%
Media 13% Media 11%
--- ---
59% 60%
Promotion, Event & 22% Promotion, Event & 22.3%
Direct Marketing Direct Marketing
Public Relations 8.2% Public Relations 8.8%
Market Intelligence 8.7% Market Intelligence 8.6%
------ ------
41% 40%
Sector concentration not materially impacted
22
Accelerated Growth Potential
================================================================================
Revenue Upsides
---------------
- Allows Interpublic companies to cross sell TNO services not previously
available, e.g. diversity marketing, advocacy advertising, analytic modeling
- Allows select TNO brands to accelerate strategic expansion via Interpublic
- Enhances upside potential for FCB to offer more services and more geographic
coverage to existing and new clients
-------
- Aligning standalone entities offers new international coverage, higher
visibility/rankings = stronger new business potential
- Allows all TNO companies to cross sell Interpublic services not previously
available; e.g. NFO (research), Jack Morton (meetings and events), Octagon
(sports marketing)
Revenue and profit benefits from above are all incremental
23
Accelerated Growth Potential
================================================================================
- Current TNO ratio of advertising to other marketing services approximately
60/40, comparable to Interpublic
-- TNO already has substantial mass in these faster growing specialties
-- Considerable further upside to expand these services with Interpublic
infrastructure and resources
- Interpublic has proven track record in accelerating international growth of
established domestic brands; e.g. Draft, Jack Morton, Golin Harris
- Collectively will examine independent agencies and specialized marketing
services to determine optimal alignment going forward
- TNO has track record of organic growth and improving margins; under
Interpublic, margins are expected to accelerate further
Again, all benefits from above are incremental
24
Closing Remarks
================================================================================
25
Summary
================================================================================
In approaching potential acquisitions, Interpublic looks at six
criteria; How does True North fare?
[DATA IN TABLE FORMAT]
Clients Quality of client partnerships [CHECK-MARKED BOX]
and depth of relationships
Agency Footprint How broad is targets core agency [CHECK-MARKED BOX]
coverage, majority ownership, etc.
Marketing Number and Quality of Non- [CHECK-MARKED BOX]
Services Offered advertising services offered
Management Experience level, track record and [CHECK-MARKED BOX]
Strengths confidence in key management
Accelerated Having a clear picture of how we
Growth Potential can accelerate growth once acquired [CHECK-MARKED BOX]
Financial Proposition Attainable at a price that makes [CHECK-MARKED BOX]
economic sense
26
Summary
================================================================================
- Interpublic's acquisition of True North represents an industry-leading
combination in:
- Size (Both Overall and by Sector)
- Clients Served
- Depth of Resources
- Breadth of Coverage
- Strength of Management
A more compelling value for shareholders
27
Appendices
================================================================================
28
True North
2000 Revenue by Sector
================================================================================
True North
Total $1,528
[PIE CHART
ILLUSTRATING
THE DATA BELOW]
Advertising 62%
Media 2.7%
Promotion, Event &
Direct Marketing 23.6%
Public Relations 10.9%
Marketing
Intelligence .8%
------
38%
29
Bozell Group
================================================================================
- Top 25 U.S. consolidated agency group
- Billings of $1.9 billion in 2000
- Blue chip clients: Ace Hardware, Bank of America, Verizon, Bristol-Myers
Squibb, The New York Times, Mass Mutual, Lorillard, Enterprise Rent-A-Car,
Pharmacia & Upjohn, Starbucks, Fujitsu
30
Temerlin McClain
================================================================================
- #1 Southwest-based agency
- $700 million in billings in 2000
- Specialists in service-driven businesses
- Highly integrated communications offering
- Key clients include American Airlines, Subaru, Verizon, Nortel and Bank of
America
31
BSMG Worldwide
================================================================================
- #8 ranked global public relations network, #7 in the U.S.
- $180 million in fee income in 2000, with offices in 33 cities in 15
countries
- Fastest growing PR firm over the last four years
- Practices in high growth areas: leader in investor relations, largest food &
beverage practice, rapidly growing in technology and healthcare
- Named PR Agency of the Year in 1997/98
- Key clients include: Bahamas Tourism, Exelon, Ingersol-Rand, Milk PEP, HP,
Kraft Foods, PhRMA, Microsoft, Merck, Quaker Oats, ADM, BMS, Toshiba,
Pfizer, American Airlines, Ocean Spray
32
Marketing Drive Worldwide
================================================================================
- Fully-integrated global marketing services network offering Promotional
Marketing, Relationship Marketing, Branding/Design, Marketing Consulting and
Specialized Promotional Services
- $500 million in equivalent billings
- 43 offices in 27 countries with over 700 employees
- Key clients: Gillette, Fujitsu, Coors, Milk Board, Intuit, Nabisco, Bristol-
Myers Squibb
- Promo Magazine award: "one of the two that made a difference in 2000"
33
New America Strategies Group
================================================================================
- Largest multicultural marketing communications company, representing all
three major ethnic populations, with 2000 billings over $500 million
- Don Coleman Advertising
- Largest and fastest growing African-American full-service agency
- Clients include: Chrysler, K-mart, Miller Brands, Domino's, Verizon,
American Airlines
- Siboney USA
- A full-service Hispanic agency
- Offices in New York, Miami, Dallas and Los Angeles
- Key clients: Nestle, Colgate Palmolive, Denny's, United Distillers
Vintners, Chase
- Imada Wong
- Los Angeles-based, full-service Asian American agency
34
FCB Healthcare
================================================================================
- A full-service healthcare marketing agency specializing in Rx, DTP and DTC
- Top ten ranked with 8 offices on 4 continents
- Top clients include Genentech/Novartis, Whitehall-Robbins, Watson
Laboratories, Merck, CollaGenex
35
R/GA Digital
================================================================================
- Creatively-focused, and award winning interactive services company,
specializing in
- First generation e-commerce sites
- Second Generation+ web site design & architecture
- Online brand experiences & relationship marketing programs
- One of world's most awarded new media creative agencies; named "Best
Creative Agency" in Adweek's special report
- Key clients include IBM, Ericsson, Reuters, Bed Bath & Beyond, Purina, Ellis
Island
36
TN Directory Services
================================================================================
- Largest directory services company (in our peer group) with capitalized
billings of almost $400 million
- Provides a full range of traditional print and internet directory services
- Key clients include: U-Haul, AT&T, GE, Chrysler, Enterprise Rent-A-Car,
Sears, Cohen/Sterling Optical
37