China's BlueFocus Acquires 20% Stake In Huntsworth
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China's BlueFocus Acquires 20% Stake In Huntsworth

China's biggest PR firm, BlueFocus, is to acquire a 20 percent stake in holding group Huntsworth.

Holmes Report

LONDON--Chinese PR giant, BlueFocus, is to acquire a 20 percent stake in holding group Huntsworth.

The investment, which is subject to shareholder and regulatory approval, sees BlueFocus inject £36.5m into Huntsworth, which owns PR firms Grayling, Citigate and Red Consultancy.

Analysis: Can BlueFocus/Huntsworth Deal Transform Western-Centric PR World?

Six years ago, Huntsworth came close to acquiring BlueFocus, before the deal was shelved at a late stage in negotiations.

Since then, BlueFocus has listed on the Shenzhen Stock Exchange, reporting revenues of $87.7m in 2012, according to the Holmes Report's upcoming Global Rankings, making it Asia's largest PR group. BlueFocus also has an existing joint venture in place with Japan's Dentsu, another Asian firm that has signalled its international PR ambitions.

Huntsworth CEO Lord Peter Chadlington said that a "senior resource" had been identified to lead the group's alliance with BlueFocus in Asia-Pacific. The person, said Chadlington, will "work on identifying key client needs from the Huntsworth and BlueFocus network."

The deal also provides some much needed support for Huntsworth after a period of disappointing growth. The group revealed today that 2012 revenues had declined by 0.3 percent, although profits were up 17.4 percent to £22.5m.

“Today’s announcement of a strategic alliance with BlueFocus, Asia’s largest public relations group,
marks an inflection point in the development of the group," said Huntsworth CEO Lord Peter Chadlington.

"This is an unprecedented alliance between leading Eastern and Western public relations
consultancies and will lead to an immediate step change in the capabilities, expertise and reach of the services that both companies are able to offer their clients," added Chadlington.

"We believe this relationship will help Huntsworth to achieve further organic growth and the investment will also significantly reduce our debt and therefore enable further investment in the engines of our growth in the coming years.”

"Huntsworth provides our Chinese clients with a global platform to expand," said BlueFocus CEO Oscar Zhao, who joins the Huntsworth board. "We believe that Huntsworth's unique mix of public relations, healthcare and digital communications will prove invaluable to many Chinese businesses. These are the first steps in establishing together a genuinely global public relations service".

The group reported that Grayling revenues declined 3.1 percent in 2012, although operating profits were up 7.8 percent. Citigate revenues also fell, by 10.5 percent in 2012. Huntsworth Health grew 6.8 percent, while Red improved its topline by 11 percent.

The group announced that it will invest £4m this year to build digital capabilities, expand its geographic footprint and improve staff training and development, moves which will also involve £3m worth of restructuring costs.

"In recent years, our strong presence in the difficult European and UK markets has restricted our
overall top line growth," said Chadlington. "As the depth of the recession in the UK and Europe has become apparent, we have invested resources in several growth markets." 

"Our £4m investment programme will impact profits in 2013 but the revenue growth potential over the next few years is significant."

Analysis: Can BlueFocus/Huntsworth Deal Transform Western-Centric PR World?

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