ANALYSIS: Consultancy Takeover - Dewe deal brings new toughness to Citigate. When Incepta’s takeover of Dewe Rogerson won shareholder approval last week, it gave the green light for Citigate Dewe Rogerson to market itself as one of the most powerf

Incepta’s acquisition of Dewe Rogerson marks the end of an era. Directors Roddy Dewe and Johnny de Uphaugh are retiring from the agency they formed in 1969 and fellow founder Nico Rogerson will follow them after a year.

Incepta’s acquisition of Dewe Rogerson marks the end of an era.

Directors Roddy Dewe and Johnny de Uphaugh are retiring from the agency

they formed in 1969 and fellow founder Nico Rogerson will follow them

after a year.



The pounds 27 million deal will create a merged PR agency with an

increasingly international outlook. The claim of David Wright, Incepta

chief executive, that ’the merger will create one of the most powerful

worldwide consultancies’ carries some weight.



Outside the UK, Citigate has PR presence across the US, in South Africa,

Scandinavia and Asia. Dewe Rogerson is strong in Central and Eastern

Europe and has a stronger presence in the Far East.



Tony Carlisle, formerly executive chairman of Dewe Rogerson and now a

director of Incepta, says: ’The agencies are complementary. There is

very little client conflict and we are focused in different ways. For

instance, they are in South Africa, we are not. In the US we’re focused

on IR and they’re mainly advertising and corporate.’



In Europe the deal creates an agency with formidable credentials. Dewe

Rogerson is the undisputed leader in privatisation work but Citigate is

one of the few strong City players with its fair share of continental

European business. Its clients include Austrian utility EVN and Spanish

telcoms firm Telefonica.



In theory Wright and Carlisle will run Incepta as the two most senior

directors on its board. But Carlisle, with pounds 6 million in his back

pocket, says he will continue to devote 80 per cent of his time to

handling clients such as Orange and National Grid.



This may suit the ten directors of Citigate Dewe Rogerson. One

ex-colleague of Carlisle’s says: ’More than with most people you either

love or hate him but he has some tremendously loyal clients.’



’He would only go somewhere where he thought he would be top dog. It

comes down to who would have him on his own terms’ says another City

source.



Carlisle might not be the sole top dog at Incepta but he will certainly

hold a great deal of influence within the group. It remains to be seen

if he intends to become involved in the day-to-day running of Citigate

Dewe Rogerson.



The deal was struck at the right time for both agencies. According to

inside sources tensions were running high at Dewe Rogerson. One of its

former directors says: ’Dewe Rogerson had reached the stage where the

ownership structure was causing tensions. The majority of the shares

were controlled by people wanting to get out of the business and this

caused problems when it came to sharing profits and bonuses.’



The deal is good for Citigate for other reasons. Unlike Dewe Rogerson

there was little tension between directors. Prior to the merger Citigate

was run, with the exception of the now-departed chief executive Simon

Brocklebank-Fowler, by an old guard of key directors who had worked with

Wright for ten years. These include Jonathan Clare, John Rudofksy,

Geoffrey Morgan, Virginia Pulbrook and Ian Seaton.



A Citigate insider says: ’All the founder directors, with the exception

of one (Leo Cavendish, now with Bankside Associates) have stuck

together.



They are known in some circles as the ’ministry of PR’, with a hint of

the civil service mentality. It’s a very nice firm.’



Observers believe that Dewe Rogerson will shake this culture up for the

better. ’What should happen is that the friendly Citigate culture which

has helped them retain so many clients for so long will be complemented

by the heavy boots of Dewe Rogerson which can kick down the doors of the

investment banks,’ says one City source.



There may be some fall-out of staff as a result of the deal. Associate

directors Irene Cervellera and Peter Clayton and head of research

Richard Buck have already announced that they are leaving Dewe Rogerson.

The directors who remain have been handed ’golden handcuffs’ deals of up

to pounds 300,000 in Incepta shares over two years.



Over the coming months don’t be too surprised to see members of ’the

ministry of PR’ depart. Key Citigate directors were all made

millionaires when the agency floated 18 months ago and have already made

their money.



While Wright may not have lost faith in his old team completely it seems

that he has identified the need for new faces in senior positions. Four

Dewe Rogerson directors - Cary Martin, Kevin Soady, Malcolm Nash, and

Jonathan Flint - have places on the Citigate Dewe Rogerson board.

Citigate Communications directors including Rudofsky, David Penfold and

Ian Hunter find that they no longer have board positions.



As is usual with agency mergers the success of Citigate Dewe Rogerson

will depend on its ability to retain key staff and clients. The only

reservation remains the timing, with many agency heads predicting tough

market conditions for the next two or three years, and the feeling that

Dewe Rogerson is not the force it was in the 1980s when it handled huge

UK privatisations.



But against this Incepta has acquired one of the most famous brands in

PR together with a flourishing international business.



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