Leeds digital marketing agency Epiphany has been acquired by Sheffield-based Jaywing in a deal worth around £18m.

Jaywing, which has offices in Sheffield and was ranked second in Prolific North’s Top 50 Integrated Agencies list, has bought the nine-year-old company for an initial cash payment of £11m, a further deferred cash payment of £1m and an earn-out consideration of up to £6m that’s subject to performance over the next two years.

Epiphany CEO Rob Shaw (L) with Jaywing chief executive Martin Boddy

Epiphany CEO Rob Shaw (L) with Jaywing chief executive Martin Boddy

Founded by Shane Quigley and Robin Skidmore, Epiphany is led by CEO Rob Shaw. Quigley and Skidmore own 47.5% of the company each, with Shaw having a 5% slice.

Shaw will continue to head up Epiphany with Skidmore focusing on growing its PR wing, which operates under the Shackleton brand. Sydney-based Quigley will take on a broader product development role for Jaywing, in addition to retaining responsibility for the fledgling Epiphany Australia business.

The deal will however also benefit staff who were given share options under the government’s Enterprise Management Incentives scheme.

Two years ago, shares were awarded to employees based on years of service and seniority. A second scheme was in place up to a year ago, and in total around three-quarters of the 140-strong workforce will benefit financially with the exact terms to be communicated internally over the next few days.

Epiphany, second in the Prolific North Top 50 Digital Agencies, reported a pre-tax profit of £1.43m for the 12 months to the end of January 2013, with gross assets of £2.34m.

Its clients include Virgin Holidays, Tesco, AXA Insurance and Pets at Home.

Jaywing chief executive Martin Boddy said: “This acquisition is a big statement of our intent to re-invent the business. By focusing on digital opportunities to marry data science with brand, acquisition and customer marketing, we will achieve superior results for our clients and better experiences for their customers.

“Not only is Epiphany a well run business with good revenue visibility, it is also a great cultural and geographic fit. Most importantly, it provides our unrivalled team of over 50 data scientists with access to the digital data which will fuel our innovation.”

Epiphany co-founders Shane Quigley and Robin Skidmore (l and r) either side of CEO Rob Shaw

Epiphany co-founders Shane Quigley and Robin Skidmore (l and r) either side of CEO Rob Shaw

Rob Shaw, group CEO at Epiphany, added: “We’ve always prided ourselves on being the first to innovate in search, and this deal represents the next evolution; connecting Jaywing’s expertise in data science with our heritage in content marketing, global paid search and website optimisation. There are also large client bases to tap into, so all in all this creates a tremendous opportunity for everyone.”

Jaywing provides a range of digital marketing, brand marketing, data analysis and contact centre services to UK blue chip clients. Prior to the acquisition, it comprised two divisions: Agency and Consulting, both of which trade under the Jaywing name.

Following the arrival of a new management team, it disposed of ecommerce business Tryzens for £6m in October to position it for a “strategically important acquisition”. The company will now comprise an Agency division and a Media and Analysis division.

The new company will mean that 270 employees are based in the North. Jaywing also has operations in London, Newbury, Swindon, and Sydney, employing over 600 people in total.