In conversation: What to consider when selling your agency

As the marketing industry buzzes over Dentsu’s potential sale of its international business, mergers and acquisitions (M&A) are once again at the forefront of industry conversations. MARKETING-INTERACTIVE speaks with Hattie Marsden, founder of Truwater Advisory, a specialised M&A advisory for tech, marketing, and professional services.

"Rumours about a Dentsu International sale have been circulating across the M&A circles for some time", Marsden said. Over the past three years, she explained, the division has shifted from being one of the most active acquirers in APAC to making no major public acquisitions, signaling waning confidence from Dentsu HQ. From 2023 to 2025, Japan posted nine consecutive quarters of growth and record profits, while international markets slipped into negative growth across major regions.

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According to Marsden, these figures put the potential sale in context: the international arm has delivered scale but struggled with margins, impairments, and growth, whereas Japan has consistently outperformed. “Whether it’s good or bad ultimately depends on one’s perspective, but selling would mean stepping back from Dentsu’s global dreams. On the plus side, it would enable it to focus back onto its core,” she added.

If Dentsu International is broken up and sold, Marsden said it could depress short-term valuations but also trigger strategic and private equity acquisitions, particularly in CXM and digital. “It could be the biggest shake-up in agency M&A since Accenture Song. The ripple effects will be felt across holding groups, consultancies, and private equity, and may test whether traditional global agency models still make sense,” she added.

On the latest episode of MARKETING-INTERACTIVE’s Marketing Connected podcast series, “In Conversation", Marsden described the market as a “year of polarisation" this 2025. 

Deal volumes in advertising were slightly down in 2024, while deal value rose, suggesting a focus on quality rather than quantity. She explained that competition exists for top-tier businesses, while financial discipline has become increasingly important. “Buyers are cautious,” she said. “If numbers aren’t where they were forecast, they’ll step away from a potential acquisition.”

Marsden outlined five fundamentals buyers look for in marketing businesses: best-in-class positioning, strong growth (ideally 20% year-on-year), healthy profit margins (15–25%), a capable management team to mitigate key-man risk, and enterprise-grade clients.

Beyond these, operational preparation is key. Founders often underestimate the importance of addressing “skeletons in the closet” (potential issues that could emerge during due diligence) and ensuring their business runs smoothly throughout the sale process.

She also breaks down the often-confusing world of valuations. “People focus too much on multiples, but it’s really an algebra equation,” Marsden said. “It depends on which P&L line you apply it to, whether its profit before or after tax, and what year you’re looking at.

The key is understanding the inherent value of the business, not just chasing a number.

Earn-out periods, she added, are shortening from the previous three to four years to 12 to 18 months, reflecting a shift toward faster integration by private equity and strategic buyers.

For founders contemplating a sale, Marsden emphasises preparation and self-awareness. “Run your business as if you’re about to sell, but not because you have to." She also stressed that clear communication with teams' post-sale is crucial, ensuring transitions are positive and aligned with the company’s values.

Know your ‘why’. Why you might sell, and be honest with yourself, your advisors, and any co-founders.

You can also catch the full conversation here on YouTube:

Tune into the rest of this conversation on your favourite podcast platforms, by searching up Marketing Connected. For all the visual people out there, we’ve got your back as well, with our vodcasts available on both Spotify and YouTube.

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