After a year of negotiations Glasgow ad agency Frame has finally been sold to its management in a deal estimated to be worth up to £13m.

The agency has been bought from the family estate of founder and sole shareholder Alan Frame, who died last year, by managing director George Cummings, commercial director Gary O’Donnell, account director Keith Bolton and creative director Angus Walker.

Cummings will now become director of group operations of the newly created Frame Group, which will include new ventures alongside its advertising arm and its recently launched digital division. Director Graeme Atha, who was not part of the MBO, will become chairman.

The team would not confirm the value of the deal, but Hugh Mason, a partner at Pembridge Partners – a leading financial consultancy for creative businesses – has speculated that the value of the agency, which works with clients such as Subway and Bulmers, would be between £9.9m and £13.2m.

“Given the marcomms industry’s nervous outlook, we would expect a multiple of five times Operating Profit. Assuming a 15-20% margin on billings, Frame’s valuation would lie between £9.9m and £13.2m. As the MBO was prompted by the death of the sole shareholder, the deal was probably a cash offer, with no earn-out period. We assume that a ratchet structure is in place to incentivise the management to hit targets and that Frame has strong cash flow to be able to raise the required debt-equity mix to execute the MBO.”