Merger and acquisition activity more than doubled last year, with this publication tracking more than 80 deals — double the activity we saw in 2022, when we reported on a record low 39 deals.

In all, our end of year research identified 95 transactions involving public relations firms, our own count supplemented by about a dozen additional deals tracked by New York-based law firm Davis & Gilbert (most of those deals involving small transactions, with seller revenues under $3 million, within the US).

The proliferation of smaller deals meant that many more buyers were involved in the M&A market than in previous years — more than 70 separate buyers — with independent PR firms and private equity (and often, private equity funded independent PR firms) dominating the market — accounting for 87% of the total transactions, with the large public companies pretty much sidelined.

“The high volume of deals this year was fueled by both a larger number of buyers and a more diverse set of buyers than ever before,” says Michael Lasky, chair of the public relations practice at Davis & Gilbert. “Transactions this year involved 73 different buyers, with a sharp rise in the level of activity from many private equity and private equity backed players, as well as 20 small and mid-sized independent firms with revenues under $25 million.

“Firms that historically would have been sellers have become buyers this year, creating a more vibrant marketplace for smaller, specialized firms.”

Many micro transactions

The huge surge in smaller deals was the most notable trend of the year. More than half (56%) of the seller firms involved had revenues of less than $6 million, and three-quarters (75%) had revenues of less than $10 million — as opposed to the previous year, when just 61% of the sellers had revenues of $10 million or less.

“The data shows us that this was the year of the small deal,” says Brad Schwartzberg, co-chair of D&G’s transactions practice. “This is what we would have expected, since smaller transactions tend to be less leveraged and, accordingly, are less affected by higher interest rates.”

The size of the sellers brought more independent public relations firms — many of them under $25 million in revenues themselves — into the market.

So in addition to larger independents that have made this list before (like Finn Partners, which completed three deals in 2023, and Ruder Finn, which has been more active in recent years) and midsize players such as always-acquisitive French/West/Vaughan, there were acquisitions by some small and boutique sized agencies, including 360+Public Relations, Evins, JPA Health and RF Binder.

London calling

Last year, we reported that there had been more activity in Europe than we had seen previously. In 2023, many of the most significant deals involved sellers in the UK: some of them among the market’s largest and most respected independents.

For sure, the UK accounted for just 15% of the total transactions (compared to the 47% involving US sellers, but the UK had more than its share of significant deals, including two firms that feature in our PRovokeMedia 250 Global Rankings and have been frequent Agency of the Year honorees: first, financial services specialist Lansons (number 152, with $17 million in fees), which sold to Swiss giant Farner, one of the most acquisitive buyers of the year; and second, technology and consumer PR firm Brands2Life (number 105 with $28 million), which was acquired by Paritee, the holding company that owns a majority stake in Nordic PR giant Geelmuyden.Kiese.

Other major deals saw financial communications powerhouse Tulchan, with 70 people, become part of Teneo; Hume Brophy, with offices in London, Brussels, Dublin, Frankfurt, Paris, Hong Kong, and Singapore, become part of the new Penta stakeholder services brand; another capital markets specialist, Powerscourt, sell to Morrow Sodali; and private equity firm Waterland take a majority stake in Markettiers4DC.

The European expansion

Over the past two or three years, a number of new European buyers have made quite an impact on the PR transactions scene.

First, it was Spain’s LLYC, which initially was focused on growth in Latin America and expansion of its digital and other content creation capabilities, but which continued its global expansion in 2023 by doubling the size of its North American footprint via the acquisition of San Diego-based technology specialist BAM.

Last year, it was Italian agency SEC Newgate, which after slowly building its reach in Europe added US and Mexican agencies to its portfolio in 2022 and continued to be active in 2023 with the acquisition of $5 million Dutch agency Wepublic. Nordic group Rud Pedersen, which also made an impact in 2022, also reported a single deal in 2023, adding Spanish firm RetiEspaña.

But Swiss giant Farner was the leading acquirer of 2023: its addition of Lansons was the most impactful of its five acquisitions, but it also bought two German firms, Kirchoff Consult and komm.passion; added leading Austrian communications consultancy The Skills Group; and bolstered its behavioral sciences expertise with Zurich-based Affective Advisory.

Public affairs in demand

The year saw activity across a wide spread of specialties, as noted by Davis & Gilbert, which classified 19% of the firms acquired as generalists and between 10 and 15% in consumer (including travel and leisure), healthcare, technology, and digital — the latter of which had been much more active in recent years.

But the public affairs sector attracted a disproportionate amount of interest in 2023, including what we ranked as the largest single transaction, which saw digital public affairs specialist Kivvit (number 80 in our ranking, with fee income of more than $40 million) merge with Washington, DC-based Subject Matter. The resulting entity will have fees of around $100 million, making it a significant player in the US public policy arena.

Two of that firm's rivals also made a big splash: first APCO diversified its offering with the addition of employee communications and change management consultancy Gagen MacDonald and UK financial specialist Camarco, and then followed up by adding public affairs specialist firms in the Middle East and Italy; then Bully Pulpit expanded its creative public affairs offering into Europe with the acquisition of highly-regarded corporate and public affairs firm Boldt, with its team of 50 across offices in Brussels, Berlin, Düsseldorf, London, Oslo and Zürich. And Stagwell's SKDK also got in on the action, buying C-suite specialist Jasper Advisors.

Edelman Global Advisory, the government affairs and geopolitical arm of the giant global independent, made acquisitions in both Brussels and Brazil, while FGS Global bought a Canadian public affairs shop and Havas-owned H/Advisors acquired Australian Public Affairs.

Other items of note:

  • Havas was the most active of the giant holding companies, acquiring both Australian Public Affairs and Klareco of Singapore for its H/Advisors business, and buying leading Indian independent PR Pundit, our reigning Consumer Consultancy of the Year in Asia; but Omnicom picked up a pair of public affairs firms in Plus Communications and FP1; and WPP supported H+K’s acquisition of a German healthcare firm as well as two FGS additions.
  • Elsewhere, divestiture rather than growth was the order of the day. There were just two management buyouts among the deals we tracked during the year, both involving Publicis-owned MSL. The first saw Washington-based public affairs firm Qorvis buy itself back at beginning of the year, while the second saw Paolo Andreoli buy his eponymous Brazilian business back at the end of the year. Interpublic, meanwhile, sold Revive Health (not long after the departure of its founder) to health system marketing company BPD.
  • Private equity continues to fuel a new generation of acquirers. Independent PR firm Berlin Rosen received funding from O2 Investment Partners and has been building its portfolio of businesses since then, with its 2023 acquisition of Inkhouse (number 140 on our global ranking) its biggest deal yet. SEC Newgate sold a majority stake to alternative investment firm Investcorp, which has also been funding US-based corporate and financial firm ICR as it expands (three deals last year, adding Bullfrog + Baum, Consilium, and Lumina Communications). And Waterland, which has funded Farner expansion, added Markettiers4DC. Eagletree Capital bought MMGY (number 170 on our ranking), which will only accelerate that agency's own acquisition plans.
  • We have already discussed some of the newer players in the M&A market, such as Paritee and Penta, but there are others worth watching in the year ahead. Michael Young's MXP Ventures is not exactly a newcomer in 2023, but its investment in Thailand’s Spotlight PR underscored its global ambitions. Clarity stepped up its growth with the acquisition of Sydney-based Sefiani Communications Group, a firm with a reputation that belies its boutique size. And policy and communications advisory firm Milltown Partners made its first acquisition with UK tech policy consultancy Taso Advisory.