NEW YORK: Sard Verbinnen & Company, a longtime go-to firm for the financial sector, may sell a significant stake to Golden Gate Capital to pursue an expansion plan devised years ago, a source familiar with the process confirmed this week.
After receiving unsolicited phone calls expressing interest in acquiring the firm, its leaders grew curious about an outside investment, the source said.
Selling a 40% stake for $60 million to the San Francisco-based private equity firm would allow Sard Verbinnen to execute its expansion plan, The New York Times reported. The deal would also secure a $50 million investment from Golden Gate in the agency’s expansion projects, including potentially opening offices in Washington, Hong Kong, and Houston, as well as "more robust political communications, research, and video production."
The expansion plan is underway, but the firm doesn’t know when it will be fully completed, the source added. The agency now has a team of 150 people in five offices in New York, Chicago, Los Angeles, San Francisco, and London. It was founded in 1992 by George Sard and Paul Verbinnen.
When asked about an earlier New York Times report stating the deal would allow founders Sard and Verbinnen to "cash in on their substantial ownership," a source said they both are and will remain involved in the firm.
The agency declined to comment on the negotiations.
Golden Gate and Sard Verbinnen have a long relationship. In 2014, the agency supported the private equity firm on communications for its acquisition of Red Lobster, a $2.1 billion cash deal, when Darden Restaurants spun off the seafood chain.
Shortly after the deal was presented to Sard Verbinnen’s 27 partners, three resigned last Wednesday. Jonathan Gasthalter was one of the partners who departed to start his own firm. Only a day later, Gasthalter & Co. was registered with the New York Department of State as a foreign limited partnership based in Scarsdale. Its jurisdiction is in Delaware.
Three other executives – Nathaniel Garnick, Amanda Klein, and Kevin FitzGerald – quit to join Gasthalther’s firm, according to the Times. Garnick is an MD at the fledgling firm and Fitzgerald is an associate, according to their LinkedIn profiles. Attempts to contact Gasthalter were unsuccessful.
Wednesday also marked the resignations of Dan Gagnier and Renée Soto; Gagnier started his own firm, Gagnier Communications, according to the Times. It was registered with the New York Department of State the same day as Gasthalther’s firm.