LONDON, May 24—The financial communications arena has been the most lucrative sector of the U.K. public relations industry for more than a decade, so it’s no surprise that the ranks of the independent financial specialist have been thinning in recent years. They thinned a little more this week, as WPP Group acquired 100 percent of the issued share capital of Finsbury, which offers financial communications, investor relations and public affairs counsel to several major U.K. companies.
WPP has been particularly active in the financial communications sector. The giant holding company already owns Buchanan Communications and a minority stake in Lord Tim Bell’s Chime Communications. Earlier this year, BSMG Worldwide acquired Square Mile and Havas forged an alliance with The Maitland Consultancy, having previously acquired Hudson Sadler.
WPP is believed to be paying around £50 million for Finsbury, which reported revenues of £8.2 million for the year ended 31 October 2000 and has about 60 employees. The deal includes about £20 million in cash, with the remainder being paid out over five years based on performance targets. Founder Roland Rudd, a former Financial Times reporter, could make as much as £35 million out of the deal, according to British newspaper reports.
According to WPP, Finsbury represents publicly traded companies worth in excess of £100 billion, including 12 FTSE 100 clients and several leading Euro 300 and Fortune 500 companies. Clients include Cable & Wireless, Centrica, Hilton Group, Sainsbury, Great Universal Stores, Lloyds TSB, the London Stock Exchange and Pilkington. In the first quarter of 2001, it was second in the M&A advisory tables, measured by transaction value, according to Mergermarket.com.
Recent high profile assignments have included Lloyds TSB’s bid for Abbey National, Innogy’s acquisition of Yorkshire Electricity, TI’s merger with Smiths Industries, Thames Water’s acquisition by RWE, and Cable & Wireless’ disposal of Optus. Finsbury has also handled the demerger of National Power and subsequent listings of International Power and Innogy.
Finsbury will operate independently within WPP and will open an office in New York, serving European and U.S. clients.