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Seven Trends As Independents Drive Increased Activity

2021 M&A Review: Seven Trends As Independents Drive Increased Activity
Written by publishing team

Acquisition activity in the PR sector rebounded in 2021, as this post tracks 51 deals involving PR agencies, which is an increase from the 39 deals we monitored in 2020 although it has not yet returned to the levels of activity (57) we observed last year The previous epidemic hit.

As activity escalated, we were also able to spot some interesting trends:

1. Freelancers lead the way

For the second year in a row, independent PR firms initiated more than half of the acquisitions we tracked (28 out of 51).

Two household names have been among the most active acquirers: US firm Finn Partners has acquired five smaller companies, including UK healthcare content agency Mediak Life, US travel specialist Hawkins International, and Hawaii’s largest agency, Anthology Marketing Group. Meanwhile, the Spanish agency LLYC has made three acquisitions, again focusing on creative companies in digital and paid media, as well as on expanding its operations in Latin America, this time with a Mexican company.

But there were new names on the list this year, too, from five-year-old SourceCode Communications to New York consumer specialist Lippe Taylor.

2. S4 Capital’s first forays into PR

When Martin Sorrell founded his new holding company, S4 Capital, a little over five years ago, it was clear that the focus of his acquisition strategy would be on those sectors he saw as the future of the marketing communications world: digital native companies, with a heavy emphasis on data and analytics.

But the first quarter of 2021 saw S4’s first PR ventures, albeit with niche companies: First, Tomorrow China, a digitally focused Chinese agency formerly part of Swedish PR group H&H, and a couple of weeks later That, Low Earth Orbit, a company founded by two Edelman Digital veterans. The two acquisitions became part of Media Monks’ digital offering from S4.

3. Teneo continues to expand its capabilities

The traditional large holding companies remained idle throughout 2021, with the exception of two Omnicom, which returned to the market with the acquisition of German auto specialist Oliver Schrote (which enabled the Mercedes business win in part) and Publicis Groupe, which in February bought the British PR technology company. Octopus Group (which ranked 195th in our global ranking of the 250 largest PR firms in the world) and two months later added another British company, consumer-focused Taylor Herring (#238 on the same list). Together, the two deals added about $15 million to the French company’s PR business.

But in addition to S4, some smaller holdings have been active, with Teneo Holdings leading the way with four acquisitions: some of which are expanding the business of the strategic consulting firm in interesting ways: the acquisition of Deloitte UK’s restructuring services business, which includes more than 250 people and 27 partners and WestExec Advisors in Washington, DC, which provide expertise in policy and geopolitical risk.

Meanwhile, Chime is back in the acquisition arena, with its subsidiary VCCP buying the prestigious Australian technology firm Sling & Stone, a regular contender in our consulting Asia Pacific Awards.

4. DJE’s Archaeological Acquisitions

Teneo wasn’t the only company interested in expanding its business into strategic advisory services that PR agencies don’t usually provide. Independent giant Edelman also made a big move in August by acquiring Basilinna, a long-time partner and strategy consulting firm. The transaction forms the basis for Edelman Global Advisory – a new firm designed to address the changing public policy and geopolitical landscape facing corporate clients and the evolving competitive landscape of consulting firms.

Meanwhile, Edelman Zeno’s sister agency has made an interesting move itself, announcing a strategic investment in Egami Group, a black-owned agency specializing in multicultural communications. Egami will use the funds to expand its operations, while Zeno expects the partnership to enhance its multicultural capabilities.

5. MBO operations and buybacks continue

Outside investment in the PR sector was fairly quiet in 2021, although the two deals that were made were significant. First, May saw international Blue Focus divestments – including PR agency Citizen Relations and social media specialist We Are Social – of private equity firm CVC Capital Partners and investment fund Caisse de dépôt et placement du Québec (CDPQ). A month later, the Brunswick financial and corporate specialist took on an outside investor for the first time, selling 10.7% of the company’s shares to BDT Capital Partners.

But PR firms were more likely to buy themselves again in 2021. In a way, the trend started with Finsbury Glover Hering, which combined its merger (which we included in our list of M&A activity for 2020 but ended in 2021) by buying some shares that were Previously owned by WPP.

MBO’s business began in 2021 with UK consumer specialist Frank buying himself back from Enero Group and continuing with Finn Partners to reacquire the stake it had previously sold to Stagwell, LLYC’s management team repurchasing the stake previously sold to MBO & Co. Both companies took full advantage of the funding to make their own acquisitions and both remained active in acquisitions after buybacks.

6. Great deals in Western Europe

Traditionally, the US and UK led the way in terms of M&A activity, but 2021 saw a very notable rise in the number of transactions involving buyers and sellers in Western Europe – including two of the biggest deals of the year.

In July, professional services firm Denton Advisory Group – formed by the world’s largest law firm – bought Brussels-based but globally active public affairs firm Interel (it ranks 125 in our global ranking with PR fee income of $125). $16 million and Public Affairs EMEA. Consulting of the Year), adding PR capabilities to existing lobbying work.

Two months later, Paritee—a new holding company launched by Lars Erik Grønntun, COO and current CEO of edtech Kahoot and former global head of H+K Strategies—acquired Norwegian independent Geelmuyden Kiese (#122 in our Top 250) to celebrate For the first time in the public relations sector.

Finally, the Dutch integrated marketing group Candid bought Coopr, which was founded in 2009 and is headquartered in Rotterdam and Antwerp in the PR arena.

7. ESG’s Small Trades

It would be difficult to demonstrate that any of the acquisitions made to enhance the expertise of environmental communications and sustainability were gigantic compared to the deals described above. Instead, what made it interesting is that it points to a scramble for larger agencies to bolster their lack of depth in the ESG space, as well as a dearth of intrinsic goals to add truly critical mass.

The first of those deals was among the first of the year, when APCO acquired Global Philanthropy Group, following its 2020 acquisition of social impact firm Tembo. Meanwhile, Teneo has entered the ESG space with its purchase of Societer, a French company that provides sustainability leadership consultancy. Financial services specialist Prosek Partners noted how important ESG was to the investment community when it took a stake in Blue Dot Capital, which specializes in sustainable finance.

This seems like a space in which forward-thinking companies are looking to invest.


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