LONDON, February 24—Incepta Group, parent company of Citigate Cunningham and Citigate Dewe Rogerson in the U.S., has acquired The Red Consultancy, one of the U.K.’s leading independent midsize public relations firms. The deal marks a significant expansion for Incepta, previously best known for its financial communications and technology acquisitions, since it makes the company a significant player in the marketing communications arena for the first time.

The Red Consultancy was founded in 1994 and was named Best New Consultancy by the U.K. PR Week in 1995. The next year, Red was named Consultancy of the Year, and in 1999 it won both the Consultancy of the Year and the Campaign of the Year honors, establishing it as one of the hottest creative boutiques in the U.K. It reported 1999 revenues of around $6 million and was ranked among the top 30 PR firms in the U.K. by Marketing magazine—and the second fastest growing firm in the nation.

The agency’s clients include some big brand names, including Microsoft, DHL, Johnson & Johnson, Amazon, Lever, Novartis, B&Q and Visa.

“We have been seeking for some time to bolster our U.K. public relations offering with a top brand that would complement our U.K. marketing services disciplines,” said Incepta chief executive David Wright. “Red offers us a leading presence in this fast growth discipline and will play a major part in our plans to build our public relations and marketing services brands across Continental Europe.”

Incepta is paying an initial price of £12 million for Red, and while the total financial consideration is dependent upon future performance, the price could be as high as £25 million. Red founders Lesley Brend and David Fuller will remain with the firm as chairman and managing director respectively, and Mike Morgan and Andrew Baiden are promoted to deputy managing directors. And unlike other Incepta acquisitions, Red will keep its own brand and will not adopt the Citigate name.

According to Brend, “The Red brand and the Red business had got to a size where we knew we had to expand overseas and be able to offer complimentary PR and marketing services. Joining the Incepta Group is a giant leg-up for us, taking us overnight to a position that would have taken ten years to achieve by ourselves. It gives immediate benefits to clients and staff and means we can continue to concentrate our energies on what we are best at—which is doing PR.”

Brend said one reason the firm elected to sell to Incepta, rather than to other suitors, was that the deal was structured to give each of its 85 employees Incepta shares, provided they stay with the firm for a minimum of two-and-a-half years. Incepta made a similar offer when it took over Dewe Rogerson, with mixed results on the staff retention front. 
Incepta has also acquired Broad Street Productions, a New York firm that specializes in high-end corporate videos, major corporate conferences, interactive media, and design and branding programs. The firm, which will be named Citigate Broad Street, has worked closely with Incepta’s existing U.S. public relations and advertising operations.