Kindred MD Nick Mustoe considers MBO as public sector cuts loom

Kindred's managing director is exploring a management buy-out as the public sector agency's parent company struggles to find a buyer.

Considering MBO: MD Nick Mustoe co-founded Kindred
Considering MBO: MD Nick Mustoe co-founded Kindred

While the Government - Kindred's main customer - instigates comms cuts of 50 per cent, it has emerged that public sector services group Tribal has judged Kindred as 'non-core' business and is seeking to divest the agency.

Tribal has yet to find a buyer and Kindred managing director Nick Mustoe is understood to have been putting together an MBO in recent months.

One source close to the agency said: 'It has been trying to sell it, but it has struggled. Its profits are nowhere near where they used to be. Now Nick is trying for a management buy-out.' Kindred declined to comment.

The Government's announcement of £6.25bn in cuts led the COI to issue a letter to all of its rostered agencies on 2 June, warning advertising and media spend would be cut by 50 per cent.

Kindred is likely to be one of the hardest hit agencies - in 2008, 77 per cent of its income arose from the public sector and fee income fell from £8.1m in 2007 (while known as Geronimo Communications) to £7m during 2009.

Tribal PR and media relations manager Gemma Wilkie said: 'Our support services (which includes comms) are no longer a core part of our business going forward. An obvious option is always going to be a sale, but there are other options as well, such as a management buy-out.'

Mustoe took over as MD from Laura Oliphant, who left Kindred in January after ten years with the firm. Mustoe was one of the founding members of Kindred in January 2009 when his advertising agency Mustoes merged with Geronimo.

Kindred's other board directors are Matt Long, Anastasia Scott, Lorna Gozzard, Ruth Kieran, Matt Harding, Max Wright and Ben Friend.

Time line

April 2010: Kindred makes a 'small number' of job cuts at its Leeds office

Jan 2010: MD Laura Oliphant leaves the agency. Nick Mustoe takes her role

Jan 2009: Geronimo is rebranded as Kindred. Oliphant is MD and Mustoe is advertising director

Sept 2008: Geronimo Communications merges with ad agency Mustoes

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