Chandler Chicco Agency has finally been snapped up, which was likely inevitable, but few had any idea who would be the lucky new parent.
The usual suspects seemed an impossible fit. But the healthcare independent is ready to take its business to the next level and needs a partner to do it.
The firm's success attracted the attention of inVentiv Health, which spent a year wooing the CCA principals and has been on a bit of a marketing acquisition spree recently, having acquired brand/design firm Addison Whitney, Chamberlain PR, and Ignite Health, an interactive agency.
Not too long ago, we were indulging in a similar level of speculation about FD before that firm was also acquired, that time by a business consulting group called FTI. Other, less high-profile deals have also been going on, including Manning Selvage & Lee's purchase of the The McGinn Group and Cushman/Amberg's acquisition of HealthInfo Direct.
All of this is no doubt whetting the appetite of many an independent firm, keen to see the return of an acquisition boom in PR. And CCA's story is another example of a company from outside the holding companies that most people think of being interested in buying a PR firm (even though the Chamberlain deal should have tipped them off about inVentiv).
How timely that StevensGouldPincus (SGP) has just released its benchmarking best practices study, which, among other things, points up the reasons why PR firms might be considered a better deal now than they were a few years ago. According to the 100 firms whose data was included in the survey, the news is all good. Revenue per staff is up, and operating margins are really up, showing the best results since 1987.
We've covered this before - if you want your firm to be acquired, you must run a great business. But it bears repeating because the trend is only accelerating as the PR market keeps thriving. Whether they like it or not, PR firm owners have had to learn to be good businesspeople. "I hate to say it, but PR people in general were terrible entrepreneurs," says Rick Gould, SGP managing partner. The downturn "scared the owners of PR firms, so now they're much more entrepreneurial."
The industry was once rich with business owners, but not many of them were what you would classify as true entrepreneurs, in the sense that they relished the challenges of making their own business grow and thrive in the same way that they enjoyed the rigors of working with clients. There is now in great evidence a generation, many of whom are second-tier leaders in their firms, of PR pros who get as much satisfaction from their own P&Ls as they do from their client results.
This new brand of business savvy might ultimately attract a new breed of buyer into the mix, notes Ted Pincus, SGP partner, in the form of private equity firms. There are one or two firms in particular that may prove attractive targets for private equity investment in the near future. We wouldn't be at all surprised.