International marketing services group Incepta is paying up to pounds 6.8 million to buy business-to-business and corporate PR specialist Key Communications.
The UK-based group will fork out an initial pounds 5.5 million in cash and shares, and a possible further pounds 1.3 million depending on Key's future financial performance.
The acquisition will help plug a gap in Incepta's portfolio of PR offerings.
With Citigate Dewe Rogerson as a wholly owned subsidiary, Incepta is already strong in financial and corporate PR but the Key acquisition adds business-to-business and consumer capabilities.
Citigate director Fiona Tooley said: 'The deal adds on a number of key disciplines that we don't have, in particular consumer, property, retail and leisure, and b-to-b PR.'
Key Communications, worth pounds 6.2 million in annual fee income, is ranked 19th in PR Week's Top 150. It has offices in London and Birmingham, with over 70 staff overall. Clients include The AA, Mars Confectionery, P&O Trans European and PricewaterhouseCoopers.
Key CEO Colin Kent - now chairman - said the deal gives them the financial backing they need to grow: 'The deal gives us a wider playing field and will take us into Europe. It allows us to grow using Incepta funds and their international network.'
Key Communications will retain its name under the deal, but will be joined at its Birmingham offices by Citigate's Midland corporate operation.
Christine Arthur, Key business development director, will oversee the merged corporate division alongside Tooley, who will head the financial team.
Kent confirmed there would be no immediate staff changes and said they would not start recruiting until mid next year.
Incepta, run by CEO David Wright, currently has a market cap of over pounds 4.2 million.