Now the Icelanders target the advertising industry

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The Independent Online

Watch out Sir Martin Sorrell. Having already raided UK retail, airline and financial services companies, Icelandic investors have now made a move into the world of advertising.

By Saeed Shah

Watch out Sir Martin Sorrell. Having already raided UK retail, airline and financial services companies, Icelandic investors have now made a move into the world of advertising.

The chosen target this time is a private ad agency called Loewy, which is chaired by Luke Johnson, the serial entrepreneur and chairman of Channel 4.

Hvita Husid, a leading Icelandic ad agency, has invested around £1m for a 10 per cent stake and taken a seat on the Loewy board, it was announced yesterday. The idea is "to join forces for ambitious expansion into Europe". Among Hvita Husid's existing Icelandic clients are Baugur, which bought Big Food Group in the UK, and Kaupthing, acquirer of investment bank Singer & Friedlander.

For Hvita Husid, the deal will initially allow it to "build a UK base in support of Icelandic entrepreneurs' international growth plans". A full-time Icelandic team has been installed at Loewy's London headquarters and it said that it has already won new Icelandic business as a result.

Mr Johnson provided venture capital backing in 2004 to Loewy, which enabled chief executive Charlie Hoult to build the business by acquisition - it made three purchases in 2004 and several merger targets are currently in final negotiations. The new money will be used for these. Mr Hoult said: "This [deal] was pretty 'left field' for us. But then I went to Iceland and saw the high-level economy and the fact that there are 300,000 people in a country the size of Ireland, who catch £4bn of fish every year. That's a lot of fish."

Loewy's aim is revenues of over £10m by the end of the year and a headcount of some 100 people, but Mr Hoult said he hoped to "blow that [target] out of the water". It is also looking at a London listing, possibly next year. Mr Hoult said: "Icelandic entrepreneurs have been grabbing the headlines for their daring investments in UK business - it's very exciting to have them on board."

Magnus Loftsson, Hvita Husid's chief executive, said: "Loewy has heritage as a world-class outfit. We recognised that the brand has international strength and the current management team has depth."

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