Paul Holmes 18 Sep 2010 // 11:00PM GMT
By Arun Sudhaman
NEW YORK: After almost two years in the doldrums, PR agencies are aggressively eyeing acquisition opportunities in North America and beyond.
That is the message from one of the PR world’s leading M&A consultants. Rick Gould, managing partner at StevensGouldPincus, told the Holmes Report that he currently has 32 agencies looking to buy, compared to 21 that are up for sale.
Those numbers, added Gould, compare to a situation that was considerably more bleak at the beginning of 2010. “We probably had no buyers at the beginning of this year,” he said. “Now, it’s so active.”
Buoyed by a solid first half of this year, said Gould, acquisition intent began to improve at the start of the third quarter. Gould also credits MDC Partners CEO Miles Nadal for “getting into gear”. Nadal recently revealed to the Holmes Report that he is aiming to spend upwards of $50 million on PR agency purchases.
In terms of capabilities, Gould said that agencies are particularly interested in adding skills in digital, social media, healthcare, public affairs and crisis management. Next Fifteen recently bought two digital agencies within one week, while Huntsworth Group, MDC Partners and Edelman have all snapped up firms in the past few weeks.
In addition, the Holmes Report is aware of a number of firms seeking acquisitions in continental Europe, the UK and key Asian markets such as China and India.
However, Gould noted that while interest is high, continued caution on the part of buyers is being reflected by the length of times it is taking for deals to complete. “They don’t want to blow it,” he said. “In the past, buyers did not do enough due diligence. I don’t think that exists anymore.”
Agencies looking to sell, meanwhile, remain hampered by unrealistic
expectations. “Buyers are much more savvy now,” said Gould. “The seller
is shooting for the moon. We just had a West Coast firm in that exact