M&A project briefs begin to resurface for financial PR

The M&A market could be emerging from its most barren period for six years, with the tentative return of the deal-driven project PR brief.

Friends Reunited: aquired by Brightsolid
Friends Reunited: aquired by Brightsolid

Last week IT firm Brightsolid handed Lansons Communications a project brief to support its media and strategic communications for its heavily covered £25m acquisition of Friends Reunited from ITV.

Lansons was appointed without a pitch process two days before the deal was announced, having worked for one of Brightsolid's subsidiaries. Tulchan Communications represented its retained client ITV.

Lansons helped explain the rationale for the deal, which saw the DC Thomson-owned firm buy Friends Reunited to create Britain's biggest family history web business by merging Genes Reunited with its existing findmypast.com site.

Financial PR project deals have been almost exclusively the domain of rights issues so far in 2009, with briefs mostly being handled by firms' retained agencies.

But with a number of high-profile prospective deals now hitting the business pages again - notably Resolution's bid for Friends Provident - one financial PR MD suggested there were now sporadic briefs for M&A projects in the market. The MD noted two such briefs in the past two weeks.

Recent deals include Apollo Group buying BPP Holdings, advised by Maitland and Tulchan respectively, and Bell Pottinger Corporate & Financial advising Heritage Oil on its $6bn merger with Turkish oil firm Genel Energy.

The impact of the plunge in M&A and IPO activity was illustrated by FD's half-year financial results, released last week. The firm, via its parent FTI Consulting, reported first-half revenues of $87.3m, decreasing from $116.8m for the same period in 2008.

Charles Watson, FD's group chief executive, noted this 25 per cent fall in revenue was exaggerated by the relative strength of the dollar this year. He said: 'On a constant currency basis, revenues declined 13 per cent in the first half of the year, reflecting the decline in global capital market activity.'

Agency MDs felt this (constant currency) figure was in the typical range of fall in revenue for UK financial PR firms, which is likely to have ranged between ten and 20 per cent year-on-year.

There is hope the second half will see an improvement. 'There is no doubt the second half is going to be busier,' said Andrew Grant, founder of Tulchan. 'If this market rally continues, we may even see the IPO window opening up again.'

How I see it

Tony Langham, Chief executive, Lansons Communications

There are a number of sellers as well as willing buyers but deals such as Friends Reunited are a rarity because companies are not coming together on price. At the moment sellers still want more money than buyers are prepared to pay. In some parts of the market, such as family history, there are a few new entrants and briefs because there is money around in profitable sectors.

The second half across the industry may be down less than we have seen in the first half, but that is largely because there was already some slowdown during the second half of last year.

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