LONDON—Next Fifteen Communications Group, the parent of technology public relations firms Text 100 and Bite Communications, has acquired a 25 percent stake in Lexis PR, one of the U.K.’s most respected creative firms. Under an unusual phased sale plan. Lexis management has agreed to sell further stakes in the company over the next five years until 2010 when it is planned that Next Fifteen will own 100 percent of the agency.
Under the terms of the acquisition, Next Fifteen will pay initial consideration of £1.272 million for 25 percent of Lexis, to be funded out of existing cash and debt facilities. Further consideration will be paid over the next five years based on performance, with total consideration capped at £10 million. Lexis will continue to operate as a separate business under its own brand name.
According to Lexis chief executive Hugh Birley, “We feel the time is right to move on to the next stage of the agency’s development. Next Fifteen offers the opportunity to extend our reach beyond the U.K., wider career opportunities for staff, and an expanded product set for our clients.
“Next Fifteen values Lexis as an expert consumer agency with additional skills which could add to their international specialist offer. We retain initial control of the business and significant shareholdings until final exit in 2010. We believe this is a significantly better model than the usual buy-out earn-out.”
Lexis was founded in London in 1992 and reported sales in 2004 of £4.7 million, up 16 percent over the previous year. It was named Marketing Magazine’s PR consultancy of the year 2004, and won PR Week’s Best Consumer, Best Business Communications and Campaign of the Year 2004.
According to Next Fifteen’s Tim Dyson, “Next Fifteen is keen to build a Group that comprises best-in-class consultancies. Lexis has an enviable record of growth, an excellent client list and a strongly entrepreneurial management team. We look forward to working with them during the next stage in their development.”
Next Fifteen recently acquired Bay Area technology firm Outcast Communications, and also owns U.K. firms August.One, a consumer and business-to-business marketing firm and Inferno, a technology boutique that represents Microsoft in the U.K.