SEC has agreed to buy 85.7 million Porta shares at 3.5p each, leaving it with a 19.3 per cent stake after new debt for equity arrangements have been concluded.
The move will see Porta and SEC set up a central marketing and new business function to focus on joint business opportunities and share best practice. It will be led by a new collaboration team comprising senior managers from both companies.
In addition, SEC founder and CEO Fiorenzo Tagliabue will join Porta’s board as non-executive deputy chairman.
Porta, the holding company of PR shops including Newgate, Publicacity and Redleaf, also announced an agreement to settle debts totalling £729,154 with Hawk Investment Holdings and Retro Grand via share issues. This will see their stakes in Porta grow to 15.6 per cent and 6.8 per cent respectively.
Porta has agreed a lower interest rate loan with Hawk Investment, worth £4.5m, which is set to mature two years later than previously – in 2021. It also agreed new terms for its £5.2m loan with Retro Grand, which is set to mature about a year from now at an interest rate of eight per cent.
Meanwhile, non-executive director Raymond McKeeve is to step down at a date to be confirmed, with the company "actively seeking a replacement".
Porta chairman John Foley said: "I previously identified the need for an equity injection and I am delighted to announce the subscription agreement with SEC, which will provide Porta with the necessary additional funds to support the growth of the company for the foreseeable future.
"The board is also pleased to report the negotiation of much improved terms with Hawk and Retro Grand which significantly reduce the company's finance costs. These important developments form part of the board's ongoing strategy to build a strong, growing business supported by an equally strong balance sheet."
Foley added that Porta is currently trading ahead of its 2016 interim results in terms of fee income and underlying earnings. In May, Porta reported a nine per cent rise in revenue to £37.1m in 2016, although earnings fell, with the firm citing investments at Newgate and a Brexit-related slowdown at its agency PPS.
SEC, which is headquartered in Italy with annual turnover above £22m, became the first company to float in the UK since the EU Referendum when it was listed on AIM in July last year.
The company further demonstrated its ambitions in the UK last September, when it took a 60 per cent stake in Newington Communications, the UK public affairs agency previously known as Bellenden.
SEC has been expanding internationally in recent years with a series of acquisitions in Belgium (2013), Spain (2014), Germany (2015) and Poland (2017), in addition to its UK activities.