Marketing services group Incepta has acquired consumer specialist The Red Consultancy in an initial pounds 12m deal.
Red confirmed it had been in talks with other potential buyers, but was attracted by Incepta's willingness to broker a deal whereby all 85 Red staff were awarded shares.
'All the way along we wanted to ensure that every single employee benefitted from the deal and had a stake in the new Red,' said joint-founder Lesley Brend.
Under the terms of the deal, all current Red staff will receive Incepta shares provided they remain at the agency for a minimum of two-and-a-half years.
According to Brend, the deal provides a strategic fit between Incepta, which was seeking to develop its non-City and non-financial offering, and Red, which was seeking a platform from which to expand.
'Joining the Incepta Group is a giant leg-up for us - it takes us overnight to a position that would have taken us ten years to achieve by ourselves,' said Brend.
As a result of the deal, Brend becomes chairman and co-founder David Fuller becomes managing director. Board directors Mike Morgan and Andrew Baiden are promoted to deputy managing directors.
The agency retains it name and, unlike others PR brands within Incepta, will sit in the marketing services division rather than under the Citigate brand.
Brend denied that the agency had any immediate plans for opening further offices or making acquisitions.
However David Wright, Incepta chief executive, said: 'Red will play a major part in our plans to build our PR brands across Europe.'
Incepta acquires Red for an initial consideration of pounds 12m comprising cash and shares. Final consideration, dependent on the future financial performance of Red, could reach as much as pounds 25m after three years.
In the year to 30 June 2000, Red produced total income of pounds 4.86m.