Paul Holmes 11 Jan 2021 // 7:07AM GMT
Mergers and acquisition activity in the public relations sector declined considerably in 2020, with the lack of visibility resulting from the Covid-19 pandemic putting plans on hold. While the volume of deals declined from 57 in our review of 2019 activity to just 39 transactions last year, the main impact was felt in the size of deals (much reduced) and the kind of activity we saw.
Once again, the major holding companies were largely absent from the acquisitions arena. Interpublic, Omnicom and WPP made no acquisitions, although there was one significant deal involving French holding company Havas, which acquired the 70-person corporate public affairs shop Cicero, which had recently become an affiliate member of its AMO global network.
If the big three holding companies did see activity, it largely involved internal transactions at WPP, with Hill+Knowlton taking over Verve in Indonesia and the Korean operations of BCW, while BCW merged its Genesis and Six Degrees operations in India.
Omnicom, meanwhile, saw its Irish office, Drury Communications, buy itself back.
That was one of three management buyouts during the year: another relatively small deal saw the management of 25-person UK agency Wildfire buy the firm from its founder; and what was one of the largest deals of the year: the merger of Finsbury, Glover Park, and Hering Schupper to create corporate, financial, and public affairs powerhouse Finsbury Glover Hering—a deal that involved WPP reducing its stake in the companies.
Internal restructuring was also the order of the day at US holding company Stagwell, which had been one of the most active acquirers of recent years. In 2020, however, most of the activity was internal: first, the firm brought its SKDKnickerbocker and Sloane & Company operations together, adding the latter’s financial communications expertise to the former’s public affairs credentials; then it combined KWT (the former Kwittken Communications) and HL Group.
Stagwell did make one acquisition during the year: SKDKnickerbocker bought Washington, DC, independent Seward Square Strategies, burnishing its digital credentials.
Private equity was also quiet compared to previous years, with only one major acquisition: a March deal in which Clayton Dubilier & Rice bought holding company Huntsworth, which in addition to its substantial Huntsworth Health operation also included more traditional public relations operations such as Citigate Dewe Rogerson, Grayling, and Red Consultancy.
Huntsworth itself then went on to acquire medical communications shop Nucleus six months later.
But with the giant holding companies and the private equity players on the sidelines, there was room for plenty of activity by independent public relations firms. Edelman, the largest of those, made its lone deal of the year in February, when it acquired Kenyan agency Gina Din Communications to expand its African footprint.
Rapidly expanding healthcare communications specialist W2O Group was by far the most active player in the acquisitions game with five deals, most of them involving non-traditional business, including specialists in machine learning and artificial intelligence; social media analytics; and a healthcare business consultancy.
A couple of other independent PR firms were active as well: APCO started the year with the acquisition of US-based, social impact specialist Tembo, and followed up by buying UK business strategy consulting boutique TWC.
Ruder Finn, meanwhile, bought video production house Osmosis, and later added Jacobstahl as part of its larger plan to bolster incubator agency Bloom.
Independent PR firms were the instigators of more than half of the deals conducted during the year (20 out of 39). The most active sectors were healthcare (seven deals) and digital (six deals).