Capital C to become part of KBS+ Toronto

Creative director Gary Watson to depart as MDC agencies merge

After becoming roommates last year, Toronto agencies Capital C and KBS+ are getting married.

Captial C will take on KBS’ name as the two firms officially merge on July 1. Both shops are part of the MDC Partners group of agencies, which blessed the union after senior execs at the two companies began chatting late in 2013 when KBS moved into Capital C’s building in Toronto and set up a shared services agreement for back-end operations like HR.

Around this time, Capital C appears to have been changing its relationship with MDC Partners, to which it had sold a majority stake in 2010. Under the original terms of that deal, MDC would be eligible to increase its stake to full ownership by 2017. However, MDC’s annual report for 2013 showed that those terms had been renegotiated during the year. By Dec. 31, MDC owned it all. (Perhaps relatedly, Tony Chapman, Capital C’s founder and public face, announced a succession plan for his 25-year-old agency at the end of 2013.)

With the KBS+ merger, Chapman is leaving the agency. However, according to a statement, he will “remain a close adviser and consultant to the KBS executive team on a range of client accounts.”

Nick Dean, president of KBS+ Toronto, said Chapman had become a mentor to him during their time as business neighbours. “Capital C has fantastic shopper marketing skills, event activation capabilities as well as social media, analytics and strategy [skills],” Dean said. “That’s a great complement to the more traditional and digital creative disciplines we have.”

Capital C’s chief creative officer Gary Watson, who joined in February 2013, is also leaving the company when the merger takes place.

Matt Hassell, KBS’ newly minted chief creative officer, will oversee the merged creative department. Jason West will move to KBS+ to oversee the accounts as executive vice-president of client services. Likewise Rick Chiarelli, formerly managing director of growth and innovation at Capital C, will become EVP, growth at the combined business.

Capital C brings with it longstanding client relationships with Unilever and Pepsico Canada, having worked on brands such as Doritos, Dove and Becel. It’ likely it will also bring the weight of its retail marketing experience to bear on KBS’s Target account. The brand has faced an unexpected uphill battle since launching in Canada, and recently began a mission to win back consumers’ trust with an unscripted video pledging to address inventory and price issues.

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