It is official, Prezence Digital will shut its doors come June. Primedia Group has announced today that the award-winning digital agency has ceased taking on new business and “will start winding down its operations with effect from 1 June 2014”.
Last month we reported that the group was looking to exit the business, which it bought from founder Tim Bishop, to a third party buyer. It seems the company has been unsuccessful.
According to a statement by the group it “was unable to conclude a suitable sale agreement that would adequately address the interests of all stakeholders, and as such has begun a structured shut down of operations.”
Primedia Group’s Commercial Executive, Geraint Crwys-Williams, says that the main priority for the company is to assist the staff through “this difficult process”.
“We will of course ensure that existing clients are not in any way compromised, and are working very closely with our Human Capital colleagues to assist all Prezence staff at this time. A large portion of the team will stay on for a further few months to ensure that we deliver on all of our client commitments in a professional and responsible manner.”
The group went on to say that a detailed review was done on Primedia’s assets and media platforms, which found that Prezence did not fit into the core offering of the media and entertainment group.
Established in the UK in 1998 by Bishop, Prezence Digital expanded into South Africa in 2002. The agency, which originally focused on the South African music and movie industries, evolved into the digital sphere with services such as mobile and web development, digital campaign management, social media and, more recently, apps. In 2005, Primedia acquired shares in the company and incorporated it into the Primedia digital group.
Some of the current staff will be leaving at the end of June but the bulk of the staff will stay until the end of August to wind things down with current clients. Our sources tell us that the staff will receive severance packages but we are not sure what the packages look like or the scale. Primedia has also not said if anyone from the Prezence team will be staying on in other roles within the group.
Announcing that it was looking to sell the company may not have been the best strategy for Primedia, this could have deterred potential buyers from the company and led to doubts about the business’ stability.
In 2012 Prezence Digital made headlines for its wildly successful MandelaStory campaign, with the endorsement of the Nelson Mandela Foundation, to celebrate Nelson Mandela’s 94th birthday. The campaign was featured on CNN, ITN and leading tech site Mashable.com.