Publication: Budapest Business Journal
Provider: New World Publishing
Date: October 24, 2005

Mirai, red-stars announce merger

Former rivals Mirai Interactive Kft and red-stars Rt have agreed to merge, forming Hungary's largest independent interactive agency, to be called Arcus Interactive Group. The two companies, which will share joint ownership, made the announcement on Oct. 18.

"Red-stars brings excellent project management and online media capabilities to Mirai's strengths in interactive marketing, design and software," said Mirai CEO Péter Szilágyi, who will be managing director of Arcus Interactive.

"We intend to show that an agency with a large team can also be flexible," said red-stars CEO Zoltán Szénási, who will fill the roles of chairman and deputy managing director of Arcus. "As digital media becomes mainstream for more of our customers, we've created a new operational model at Arcus with which we can offer the most cost-effective solutions and the most value for every kind of project, including efficient customer relationship management."

The ownership structure of the new company will include venture capital fund Primus Capital Partners LLC, Mirai owners Szilágyi and Imre Végvári, and red-stars owners Szénási, Tamás Földesi and Zsolt Grégász. No shares will change hands as a result of merger proceedings. The valuation of the two merged firms will determine the volumes individuals hold in Arcus Interactive, explained Végvári, Mirai's communications and creative director, while declining to go into detail.

In 2004, Mirai recorded turnover of Ft 169 million ( $665,000), while red-stars generated revenue of Ft 286 million. Both companies were profitable last year, Végvári added.

The owners of the merged Arcus Interactive say they expect to realize revenues of around $3.5 million in 2006, outpacing the projected 30% -40% growth of the online media market, a joint press release announced.

Red-stars is a survivor of the dot-com era. Formerly a joint venture of Vienna-based digital media agency red-stars.com data AG, with offices in Hungary, Slovakia and Russia, the enterprise intended to go public on the German Neuer Markt. The IPO never happened, however, and instead management at red-stars' Hungarian office purchased the local company and turned it into a successful online media agency, according to Földesi, client services director and co-owner of red-stars Rt.

Red-stars, combined with Mirai, will count among its clients British American Tobacco Hungary, Magyar Telekom Rt, IKEA Hungary, McDonald's, the OTP Bank Group, and Procter & Gamble.

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