Tomorrow's Business Today
The London flak trade comes of age part II
Yesterday we reported on the sale of Camarco to American giant APCO, a £20 million deal that we guessed must have founder CEOs of other PR firms getting twitchy.
The rationale for this deal and similar others is that the world is increasingly global and that being a London-only operator has limits.
CEOs and companies need a resource that spans continents.
So who in London is left to buy?
Other than the small cap specialists perhaps just Headland, Montfort, Powerscourt, Greenbrook and Hudson Sandler.
All these were founded more than 10 years ago – except Montfort, the successor to M Communications.
Do they want to sell as we speculated?
It doesn’t sound like it.
“If you build a firm to sell it you will either sell on the cheap or to the wrong people, and there are a lot of wrong people out there. We have had owners who pretended they had the finances but then backed away post-acquisition and left us with the debts of their other ill-founded acquisitions.”
Another: “We are in no hurry to lose our hard-won independence in a buyer’s market.”
Ok, but there must be an upside to being owned by a US giant.
The US is the capital markets centre of the world – many clients are at least a third owned by US shareholders and many have sizeable revenues from there.
Lots of activity emanates from the US in the first place. And young bright things want to travel, want to live in America for a bit. Your chances of keeping them increase if you have a New York arm
The downside is that culture can be lost after a sale, and integration is usually difficult. And you are suddenly tied to a budget you must make each year.
Say you are the go-to agency for clients in a crisis; that niche is in danger of being lost once the parent company moves in.
Moreover, these big PR deals surely create a vacancy for scrappy insurgents founded by people fed up of working at big agencies.
Press release of the day
It will be another Awful April for household finances, warns this from interactive investor.
Price rises are coming from all directions, and tax allowances are being frozen.
There’s some good guidance on how to pay less tax and cut other bills.
Stories that will keep rolling
1) How badly have Royal Mail strikes hurt Moonpig?
2) Is the portfolio of Supermarket Income Reit still falling? What’s the bottom?
3) Is AO World seeing inflation come down in its markets?
4) Will H&M buy up smaller struggling rivals?