Paul Holmes 17 Mar 2001 // 12:00AM GMT
LOS ANGELES, March 19—When Britain’s Incepta Group paid up to $150 million for New York mergers and acquisitions specialist Sard Verbinnen, Michael Sitrick’s interest was understandably piqued. While his Los Angeles-based agency Sitrick & Company doesn’t handle quite as many M&A’s as Sard, he’s in the same line of business—handling the kind of mission critical issues that keep CEO’s awake nights—and his firm is significantly larger.
So Sitrick engaged investment-banking powerhouse Wasserstein Perella to field offers from a handful of potential buyers. While the offers were flattering, he says, he has decided to stay independent, primarily for cultural reasons. Having ended discussions with potential buyers, Sitrick will instead look to acquire firms in both New York and northern California in a bid to build a large independent national firm with a portfolio of high profile, high-margin business.
“One of our great strengths is being able to act without being second-guessed,” Sitrick says. Two years ago, for example, the firm confronted ABC’s 20/20 over an upcoming interview with the CEO of dietary supplement maker Metabolife. Worried that 20/20 would screen a selectively edited version of the interview, Sitrick created a website where the interview could be seen its entirety. Then last year, the firm took on accused spy Wen Ho Lee as a client, challenging several major media outlets, including The New York Times, which had contributed to the impression of his guilt.
“We were asked by people from larger agencies whether we were worried about upsetting reporters by taking such an aggressive approach,” says Sitrick. “We have to be able to take actions like we did on behalf of Metabolife with respect to 20/20 without checking with a corporate parent. We don’t want to worry that representing Wen Ho Lee is going to upset someone at headquarters.”
Ironically, he says, his firm recently received a referral from someone at ABC because of the way the Metabolife episode was handled.
So now Sitrick is looking to expand without the aid of a corporate parent. Says Sitrick, “We have had phenomenal growth over the past 12 years. Last year was, by far, the biggest year in our history. This year should be even bigger. The nature of our practice is such that, in a good economy we do well and in a bad economy we do better. And right now, our bankruptcy and litigation practices are booming.”
One priority is finding a partner in Silicon Valley and expanding the firm’s technology practice. Sitrick has handled several projects for technology clients—including the high-profile IPO of Global Crossing—and has been asked several times to handle ongoing marketing communications. He says his firm recently turned away a seven-figure account because it lacked the expertise to handle day-to-day technology public relations. For that reason alone, partnering with a Silicon Valley firm makes sense.
He’s not worried about diluting the Sitrick brand. “The way we operate is the way a law firm operates. We have partners who run their own businesses and don’t worry too much about what everyone else is doing. As long as we continue to offer the kind of crisis management services we are known for, I think we can expand into new areas. Skadden Arps has never lost its reputation as a great M&A law firm, even though it has lots of other practices.”
Sitrick also plans to make a serious investment in New York, where the firm has a presence but has had difficulty establishing a significant foothold. Ideally, he says, he would like to acquire a firm with a strong investor relations foundation and some experience in the mergers and acquisitions and crisis management arenas.