In a rare combination of thriving independent agencies, Andrew Graff, CEO of Boston’s allen & gerritsen (a&g), and Tim Reeves, CEO of Philadelphia’s Neiman, today announced a&g’s acquisition of Neiman. The agencies are joining forces to provide enhanced value for their clients, and a new destination for innovation-oriented U.S. marketers.

The combined agency will operate as allen & gerritsen, with nearly 200 employees in flagship offices in Boston and Philadelphia. The newly combined allen & gerritsen will be one of the nation’s Top 20 independent agencies. The agency’s corporate headquarters will be in Boston, and its innovation R&D unit will be centered in Philadelphia.

“Clients love independent agencies for their agility and entrepreneurial zeal,” said Graff. “But to flourish tomorrow, independents need something else: scale for innovation. a&g and Neiman already are innovation leaders. Together, we will have the scale to systematically bring to market the powerful new marketing inventions that our clients cherish. We won’t be burdened with competing internal profit centers that strangle discipline-agnostic innovation. And we will have the freedom to invest first in the lifeblood of innovation – people, culture and R&D.”

Both agencies have national innovation reputations – a&g through its thought leadership and its novel venture-capital arm, a&g Ventures, and Neiman through the inventions of Neiman Labs, its R&D unit.

“Boston and Philadelphia are the perfect locales to build a new national destination for independent innovation,“ said Reeves. “It only makes sense that two fiercely independent agencies would come together in the two cities that led our nation’s independence – and that now are world centers of technology, venture capital and higher education.”

The a&g/Neiman transaction is a relatively uncommon one in the advertising world: a merger of two thriving privately owned companies – not to facilitate ownership transitions, but rather to create leapfrog growth.

Graff and Reeves have been thinking together about the future of marketing since 2006, as members of the same American Association of Advertising Agencies (4A’s) “Forum” of agency owners. The idea of joining forces was borne out of their Forum meeting in New York City in May 2012.

Said 4A’s President Nancy Hill: “The leadership demonstrated today by allen & gerritsen and Neiman is a compelling example of agencies thinking creatively about the structures necessary today for innovation tomorrow. I’m gratified that 4A’s was the launching pad for this exciting development.

“It’s also gratifying to see two agencies come together that care so deeply about people,” Hill said. “I’ve watched Andrew Graff put unprecedented rigor behind the pursuit of cultural excellence – so much so, that his agency has been named our industry’s Best Place to Work two years running. And I remember in 2008 when Tim Reeves came to New York to make the case to me that our industry should focus more on workplace excellence by creating a Best Place to Work prize. This marriage was meant to be.”

a&g was named AdAge’s Best Place to Work for its exemplary “focus on nurturing the next generation” of “young and fearless” marketing leaders. (Click here for the 2011 award, and here for 2012).

Greg Weir of Weir Financial Services in Minneapolis advised Graff and Reeves on the transaction. Weir was connected to Graff and Reeves through the 4A’s.

“Andrew and Tim’s approach to this deal was unlike any I’ve seen,” said Weir. “Most deals consist of the owners figuring out the money, and then telling their leadership teams the great news. But often the leadership teams don’t agree that it’s great news. And that’s why some transactions don’t succeed. Andrew and Tim went about this exactly the opposite way. They immersed their leadership teams together and reached a shared vision and organizational growth strategy before they even negotiated the transaction itself.”

Said Graff: “Our leadership teams at a&g and Neiman have studied this together for a year. To a person, we believe this is the best way to serve our clients going forward, and to enable the great people of our agencies to achieve their dreams.”

Graff will continue as CEO. Reeves will head a&g’s PR and executive consulting practice, a new offering for a&g. Reeves also will join Graff and Chairman Paul Allen as a shareholder and board member.

“This is a dream come true for me,” said Steven Neiman, who founded Neiman with Frank Coleman in 1980, and who has known Graff through 4A’s leadership since the 1990s. “To think the agency Frank and I created in Harrisburg, PA, 33 years ago is now a central part of one of the nation’s 20 largest independent agencies is the professional accomplishment of a lifetime.”

About Neiman

Neiman is a 33-year-old startup that is creating brand conversations for great national and regional business partners such as Comcast, Dietz & Watson, Insight Pharmaceuticals (an OTC marketer whose brands include e.p.t and Monistat), Sunoco, Temple University, Trex and Yuengling. Meanwhile, Neiman’s R&D unit, Neiman Labs, is creating tomorrow’s brand conversations today. The latest Labs innovations can be found at WeAreNeiman.com/labs.