Financial Dynamics
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Financial Dynamics

If 2003 was, as chief executive Charles Watson says, “a year of liberation” for Financial Dynamics, which bought itself back from Cordiant with the assistance of global private equity firm Advent International.

Holmes Report

Corporate and financial communications firm with M&A and public affairs capabilities

If 2003 was, as chief executive Charles Watson says, “a year of liberation” for Financial Dynamics, which bought itself back from Cordiant with the assistance of global private equity firm Advent International, enabling the firm to offer ownership of about 40 percent of the business to senior FD employees, then 2004 was a year in which all the hoped-for benefits of the firm’s new ownership structure—greater cooperation across geographies, more multi-office business—began to be realized. In the past 12 months, the firm has won or grown more than 30 pieces of business that are now served on both sides of the Atlantic and 15 percent of the firm’s revenue is now derived from cross-border business.

FD has been vying with arch-rival Brunswick over the top spot in the U.K. mergers and acquisitions league table almost since the two firms were founded (it was number one in volume and number two in value in the most recent mergermarket survey), and in recent years that battle has carried into Europe, where both firms have been building a presence (FD was number one in volume in Germany, and number three in France).

FD’s biggest deal assignments over the past 12 months included assisting Aventis with its defence against a €50 billion hostile bid by Sanofi (FD worked in France, Germany, the U.K. and U.S.) and Harmony Gold Mining’s €8.1 bid for Gold Fields Ltd. (U.K., U.S. and South Africa), as well as Air Liquide’s acquisition of Messier Griesheim, GE Commercial Finance Real Estate’s contested bid for Sophia, three deals for Terra Firma, and the merger of Taylor & Francis with Informa. The firm also handled IPOs for Admiral, Eircom, GE spin-off Genworth, and Mechel Steel, the first Russian company in two years to list on the New York Stock Exchange. It worked on the financial restructuring and re-listing of British Energy; an LBO for Warner Chilcott; and a refinancing for Welcome Break.

While FD is best known for its financial communications and transaction work, about 40 percent of its clients are not publicly traded companies. The firm works extensively with public sector clients, with private companies, and with professional service firms, and it provides an increasingly broad array of services outside the financial space, including business-to-business communications, crisis and issues management, employee communications, brand strategy and media training. The firm has specialist teams working in several sectors, including consumer industries, financial services, life sciences, media, technology and telecoms, and what the company calls “basic industries,” which includes engineering, electronics, industrial services, construction, and natural resources. An obvious priority is expanding its public affairs and issues management capabilities, and the acquisition in mid-2005 of public affairs firm LLM and issues management and litigation communications specialist Partner PR. The firm also formalised its print and online design capabilities in 2004 with the creation of 85four, a new corporate and financial design consultancy.

The firm differentiates itself through its people and, increasingly, its infrastructure. On the people front, Watson is a Valin Pollen veteran who has handled numerous IPO and M&A assignments and who led the MBO that set FD free last year. Giles Sanderson leads the technology and telecoms team; Sarah Marsland leads the investor relations practice; Geoffrey Pelham-Lane, former head of investor relations for NatWest Group, leads the financial services practice; Andrew Dowler serves managing director of the consumer sector; David Yates is responsible for the life sciences and chemicals sector; Nina Mitz leads the firm’s French operations; Sunday Times veteran Andrew Lorenz, who leads the basic industries and business services practice; crisis and issues management specialist Jon Aarons; chief operating offices Tim Spratt; and business-to-business specialist Tarquin Henderson, former head of corporate communications for Logica.

New additions include Bob Haville, formerly of James Capel and Morgan Stanley as senior vice president of investor relations in London; and Niall Hall, formerly of Westbury Consulting, as senior vice president of management coaching. Jonathan Hawker and Susie Tydeman joined as part of the Partner PR acquisition and Craig Leviton came with LLM. In addition, Oliver Pawle, vice chairman of UBS Investment Bank, was named chairman, succeeding Tony Knox, who held the position for 17 years.

On the infrastructure front, the firm has made a major investment in human resources over the past 12 months, providing increased opportunities for interoffice transfers, adding a new senior vice president of human resources (Natasha Flores), creating a chief information officer, and implementing incentives that—along with the employee ownership structure—actively encourage the sharing of business between offices and practice areas.

The firm currently has more than 180 people in the U.K., almost 100 in New York, and 15 each in Dublin, Frankfurt and Paris (where the strength of the private equity sector is fuelling growth). While long-term plans call for additional expansion in the Asia-Pacific region, that’s on the back burner for now; a higher priority is Brussels, where FD needs to add a public affairs capability to complement its growing Washington, D.C., operation. Revenues over the past 12 months are believed to be up 20 percent—FD doesn’t submit numbers to league tables—with 2005 fees expected to reach up to £45m. New business successes included Arakis, Beiersdorf, CB Richard Ellis, Climate Change Capital, Enterprise Ireland, Euronext, Fortis, GE Commercial Finance, National Trust, PartyGaming, Rank Hovis MacDougall, and Tate & Lyle.

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