Cision plots expansion via Capitol Acquisition Group III merger

Capitol approached private equity firm GTCR, Cision's owner, to talk about a possible deal in the fourth quarter of last year.

Cision CEO Kevin Akeroyd.
Cision CEO Kevin Akeroyd.

CHICAGO: Cision is going public through a merger with blank-check company Capitol Acquisition Group III, it said Monday morning.

If completed, the deal would give the combined company a $2.4 billion enterprise valuation and a capital injection of about $325 million. It is expected to close in the second quarter.

Cision’s leadership, including CEO Kevin Akeroyd and CFO Jack Pearlstein, would remain in place after the deal closes. Capitol chairman and CEO Mark Ein would serve as vice chairman of the combined company’s board of directors, on which Capitol president and CFO Dyson Dryden would also have a seat.

Akeroyd, who joined Cision last summer, said the influx of capital, public currency, and financial flexibility would allow Cision to reduce its debt, invest in its core offerings, and keep its merger and acquisition options open.

Capitol approached private equity firm GTCR, Cision’s owner, to talk about a possible deal in the fourth quarter of last year, Akeroyd said.

"At some point in time, when there’s venture capital or private equity, a liquidity event has to happen for the model to work," he explained. "That liquidity event usually takes the form of an IPO or another M&A where GTCR is the seller rather than the buyer."

Cision has bought up several marcomms technology companies in the past three years. The company merged with Vocus in a 2014 deal facilitated by GTCR. Since then, Cision has snapped up service providers such as PR Newswire and Gorkana and launched an all-in-one platform last year called Cision Communications Cloud.

Cision, which has about 20% market share in the marcomms products and services industry, is banking on the unified platform to drive growth against single-service providers, Akeroyd said. About 1,500 clients have begun using the Cision Communications Cloud platform since its launch, about 200 of which are new customers.

Cision is also planning to roll out two additional services: Cision ID and InfluencerGraph. CisionID is an earned media service it said will help clients "deliver reach, engagement, audience and behavior data, and most importantly, business value measurement and revenue attribution," according to a spokesperson. InfluencerGraph will help clients target influencers.

Akeroyd said those initiatives would help the company grow market share in marketing and advertising technology, allowing it to expand into earned media, which is "about 10 times bigger."

"When we introduce true measurement, where the comms office can have the same measurement as paid, the trickle of money that is going from the paid media to earned media will become a creek or river," Akeroyd said. "The water is just going to rise and all the boats will rise with it. Also, we’re the only global player. We’re accelerating the gap rather than letting it close. That will be a way for Cision to grow against its competitors."

Gregory Galant, CEO of Muck Rack, commented that Cision’s merger will only reduce options for users.

"Seeing all these companies rolled up initially reduced choices for people in the PR world," he said. "What’s needed now is a lot more choice."

Akeroyd responded that the number of options available to the user will not change.

"It’s not about one company owning a bunch of toys or Legos," Akeroyd said. "It’s about one company that bought the right Legos and snapped them together. We think clients will choose the single platform [Cision Communications Cloud]."

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