Sotheby’s Acquires Amy Cappellazzo’s Art Agency Partners for $50 Million
Another former Christie's exec moves to Sotheby's.
Sotheby’s announced it is shelling out a whopping $50 million—plus additional performance incentive costs of up to $35 million—to acquire Art Agency Partners, the private consulting firm founded just two years ago, by ex-Christie’s contemporary head Amy Cappellazzo and high-powered advisor Allan Schwartzman.
The news comes shortly on the heels of an announcement that former Christie’s executive Marc Porter will join Sotheby’s and continues on a sort of musical chairs game amid intense competition between the archrival houses. Sotheby’s said Porter will serve as chairman of the fine art division that was newly created to accommodate the acquisition of Art Agency.
Sotheby’s CEO Tad Smith and other Sotheby’s executives discussed the acquisition in a conference call Monday morning with analysts and investors. Cappellazzo and Schwartzman also participated in the call and fielded several questions about the acquisition. Smith said the firm has a staff of 15. As part of the acquisition, Art Agency partner Adam Chinn will join Sotheby’s as executive vice president of world-wide transaction support, succeeding longtime finance expert Mitchell Zuckerman.
As artnet News reported, Zuckerman was one of dozens of Sotheby’s employees who applied for a buyout under the firm’s recently implemented program.
“The principals of this firm bring with them to Sotheby’s over sixty years of art world experience, spanning every facet of the industry—from curation to art criticism and art dealing and advising,” said Smith. He reiterated this point when asked by an analyst about the $50 million valuation for the company and how Sotheby’s arrived at it.
Smith noted the varying lines of Art Agency Partners’s business, noting “we are thrilled to add these profitable streams to Sotheby’s.” Smith noted the following: “providing advisory services on a retained basis to some of the world’s most important collectors; helping to develop and manage their art collections, including both short-term and long-term planning; bringing together buyers and sellers of art in private transactions; and advising collectors on financial, estate and other aspects of their investments in art.”
“I want to take a moment to make absolutely clear that today’s acquisition is not the first of many,” Smith said. “Rather it is a strategic move to add profitable revenue streams and new capability to Sotheby’s business.” He added: “In terms of integration and implementation, Art Agency Partners will join Sotheby’s immediately.”
Further, Smith said that Cappellazzo and Schwartzman will head a new fine art division principally focused on 20th and 21st century art as well as a good portion of 19th century art. When Porter joins the firm, he will serve as chairman of this division, focusing on global business development.
Among other Art Agency Partners who will now be joining Sotheby’s are: Ed Tang, a Hong Kong native who worked at both Phillips and Christie’s before joining AAP this past summer; Madeline Lissner, an investment banker who graduated from Harvard and received an MBA from the Wharton School at the University of Pennsylvania; and Joe Dunning, who has spent the last four years in the postwar and contemporary department at Christie’s London.
When an analyst on the call posed the question: “Is this an evolution of what he customer demands?”, Cappellazzo said: “They need advice [including] taste maker advice, market maker advice, asset class advice, legal tax advice, [and] less sexy advice like conservation matters or expertise about loans and things. It’s just part of the logistics and mechanics of collecting.”
During the call, Smith addressed several other related financial matters including the company’s priority of repurchasing shares. “Due to the ongoing [AAP] deal negotiation, we were unable to do that in December when the trading window was open. As a consequence, we plan to pre-announce our fourth quarter results in the coming weeks in order to allow us to make share repurchases.”
Smith also said the search for a new CFO, in the wake of the recently announced departure of Patrick McClymont has already yielded “excellent candidates.”
Sotheby’s stock has been under pressure of late. It is currently trading around $22 per share, down from above $27 per share a month ago.
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