The operation to save Brisbane creative agency Khemistry from being smothered in the collapse of GrowthOps took just two weeks.
The negotiation and the deal that followed worked because of industry comradery, respect for expertise and an often stated view that value lies in the people who do the work.
Andrew Welstead, founder of agency Flip and technology consultancy Antero, heard on April 1 about GrowthOps going into liquidation. He made some calls to confirm this was fact.
“I know a couple of people with Khemistry so I reached out. It was improbable to me that they could fall over that way,” he told AdNews.
Over at Khemistry, the managing director, Kelly Brightwell, and her team were nursing sore heads when they started fielding telephone calls when the news of GrowthOps going into liquidation broke.
“The thing that really stood out to me about Welly (Welstead) was he was really interested in the team and the work, and understood that the value of Khemistry lies in the people,” she told AdNews.
Welstead first came across Khemistry when his then small digital agency lost a client to them.
“Who are these guys?” he thought.
But Khemistry did a good job with that client and Welstead’s business was more on the digital side.
“They’ve always had a really good name,” he said. “They later joined that GrowthOps group, which I personally thought was a mistake. Guess I was right, how it turned out.”
Welstead decided to do something and he eventually made contact with the liquidators, McGrathNicol.
“I had to start negotiating with the liquidators, who are actually quite good to be honest. Good folks and good heads on their shoulders,” he said.
“Took me a while to get their attention, because they're dealing with the collapse and GrowthOps had, I think, 20 subsidiaries, with Khemistry just being one of them.
“I got their attention finally and I made it clear that I wasn't just kicking around looking for a bargain. I was a serious buyer.
“Because all the entities were all in liquidation, we couldn't actually buy Khemistry the company.
“What we could purchase was the name and so I took a bit of a risk … I immediately went and hired all the staff.”
He then organised a Google Meet call with the liquidators
His position was that the company had no value without the creative team.
“You have no value, really, without the team, and I've now retained them,” he told McGrathNicol.
He came up with a number, a sale price for the company name.
McGrathNicol said: “No.” And came back with another number.
Welstead said: “Alright, if that's what gets it done.”
He said the liquidators were professional through the whole process.
“Obviously they've got to give the best return to the creditors as they can,” Welstead told AdNews.
“And now we've got people who are no longer unemployed. People are back to work, clients are being serviced, and there is a greater return to the creditors.
“It's a good news story for everybody. A bit of a risk for me, obviously.
“I'm going to make this work now. I'm highly confident in that.”
He’s been contacting clients who are happy to be working with the same team.
“Khemistry as its own business was doing quite well,” he said. “It was liquidated because of national business problems.”
The financials of the deal haven’t been released but will eventually be known when the liquidator makes a detailed report to corporate regulator ASIC.
Over at Khemistry, about eight staff are working full-time, with a string of freelancers.
“It was heartbreaking to see the impact of the closure on our team, our clients and our suppliers,” said Kelly.
“In the days after, there was a real restlessness in the local industry - a sense of loss. Not just for the unique work that Khemistry created but for the group of people who come together to create it.
“Thanks to Andrew, now as an independent agency, we’ve been able to hire many of our original team and get back to what we do best - using behavioural science and creativity to solve our client’s problems.”
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