Tomorrow's Business Today
A shake-up at Sir Alan's shop
Brunswick is the most influential PR company in the UK, ever. If rivals bristle at that, it is partly because they know it is true.
Even if they set out to do things differently, they are still defining themselves in comparison to the firm founded by Sir Alan Parker in 1987.
Last week Brunswick sold a near 11% stake to BDT Capital Partners in a deal that values the business at £500 million — £140 million gets handed to 200 partners.
Sir Alan gets £70 million and co-founders Louise Charlton and Andrew Fenwick a lesser amount, let’s speculate £10 million each.
The more junior of the partners, those who haven’t been there long, get nearer £20,000 I am told, and may not be delighted with that.
(Brunswick won’t get into the specifics because it might reveal more than they wish about salaries – every employee gets at least 12.5% of their pay. The partners do get shares in the new business too.)
That £500 million valuation is interesting – perhaps it is lower than we might have guessed. Teneo was worth $700 million two years ago and Brunswick is a more premium player, at least in its own eyes. Why doesn’t the valuation reflect that?
Brunswick makes the point that this was not a value maximisation transaction and notes that BDT is a long-term partner — it’s not a private equity play.
A thought from a rival: the deal does nothing to address the main issue facing the business – what happens when 65-year-old Parker packs up?
In a letter to clients, Parker tells them while “it is not generally our style to be in the news”, he has some for them, not least that he is committed to being the chairman “as I ever have been”.
If I’m a client do I care about this deal? Maybe not, though I’m getting a closer look than before at what my fees are worth to Brunswick, and perhaps wondering if I could get the same service cheaper.
Rivals might think now is a good time to call Brunswick clients with counter bids. Sir Alan might be hitting the phone more than usual in the next few days.
What next? Perhaps an IPO, probably in America where valuations are generally higher. Brunswick plays down such talk, noting that 90% of the firm is still owned by partners.
A float might change the culture, which they don’t want.
And fair play for announcing this deal on their own terms. It didn’t leak, clients might be pleased to note.
Tomorrow: more Brunswick.
Press release of the day
Up to three million UK homes could be eligible for green mortgages worth £190 billion, says this from Kamma.
We read: “Government targets for improving UK property suffer from a major gap in funding, yet green securitisations could more than cover this gap, unleashing a green funding revolution in the UK marketplace.”