NEW YORK—Giant private equity group KKR, one of the largest and most successful investment companies in the world, has bought a large stake in corporate and financial communications specialist FGS Global in a deal that values the firm—which is part-owned by WPP—at around $1.4 billion, WPP announced today.

WPP will remain the majority owner of the company, and FGS Global employees will remain substantial shareholders. Golden Gate Capital, the private investment firm which has been a shareholder in FGS Global since 2016, will exit its investment through the sale of its interest to KKR, WPP said.

The deal is expected to close before the end of the third quarter of 2023, subject to regulatory approvals and other customary closing conditions.

The strategic partnership with KKR will help to drive the continued growth of FGS Global, the innovation of its service offering and the expansion of its international footprint, WPP said. KKR is making the investment in FGS Global primarily through its European Fund VI.

“FGS Global has established itself as a global leader in strategic advisory and communications, providing board-level counsel to the world’s leading companies and organisations. We are delighted to welcome KKR as a new strategic partner in FGS Global, in a transaction that recognizes the tremendous value of the business and its potential for continued strong growth,” said WPP CEO Mark Read.

The deal is the culmination of a journey that began four years ago with the merger of UK-based financial communications specialist Finsbury, US public affairs firm Glover Park and German market leader Hering Schuppener. In 2021, Finsbury Glover Hering also acquired New York-based financial communications specialist Sard Verbinnen and shortly thereafter rebranded as FGS Global.

Since then, the firm has established itself as a global leader in the lucrative mergers and acquisitions arena, topping mergermarket’s ranking of global advisors on financial transactions. But it is also a major player in corporate communications—including crisis communications, litigation support, and employee engagement—and public affairs, including geopolitical issues. It has advised clients on situations ranging from the development of the Covid-19 vaccine to whether to do business in Russia in the wake of the invasion of Ukraine and has positioned itself as "the strategic advisor for the stakeholder economy."

FGS continues to be helmed by three co-chairs—Carter Eskew, who founded Glover Park; Roland Rudd, who founded Finsbury; and George Sard, who founded Sard Verbinnen—and by global CEO Alex Geiser, previously of Hering Schuppener. In 2022, it was this publication’s Corporate and Financial Agency of the Year in North America, EMEA and the Asia-Pacific and globally, an unprecedented clean sweep. It also grew to become one of the top 10 public relations firms in the world, with global fee income in excess of $400 million.

The interest of KKR, and the substantial value placed on FGS, is hugely significant for the sector. The deal marks the first time an investor the size and stature of KKR has made this kind of investment in communications—a recognition of the increasingly mission critical role firms such as FGS are playing for their clients around the world as a result of the shift toward stakeholder capitalism.

KKR might also have been impressed by the firm’s ownership structure. Since the merger, FGS has placed a heavy emphasis on employee ownership, with more than 400 of the firm’s 1,300 or so employees holding an ownership stake—an approach that has helped it attract former management consultants, bankers, journalists and political leaders to its ranks. KKR has long touted its own employee ownership model as a key to its success.

In reporting news of the deal last week, the Financial Times said KKR was expected to acquire more than 30% of FGS from a combination of senior employees and from WPP, which currently owns about 57.4% of the company.

KKR has been a longtime client of FGS.