The terms of the deal remain undisclosed, but it is understood that the group’s former owners received back a fraction of the money they had put in to the business since 2007.
VSS and ABRY will remain onboard as minority shareholders, having invested, together with Writtle, a further £4.5m in the business. The new capital will, according to a statement, ‘fund further growth’.
PRWeek understands that ordinary shareholders Loewy, primarily staff who had received equity holdings as incentives, received no financial remuneration for their shares.
Only holders of a new tranche of ‘preference shares’, held almost entirely by VSS and ABRY, received payment for their shareholding.
Former Next Fifteen chairman Will Whitehorn, who was named Loewy chairman last year, said that new plans to incentivise current staff with equity were being drawn up.
He also told PRWeek that the combined group’s sole PR business, Speed Communications, had been identified as a key area of potential growth.
Whitehorn is to join the board of Speed during the next couple of months as chairman, while continuing his Loewy role and sitting on the board of Writtle Holdings.
He said that finance would be in place to support a strategy to significantly grow Speed over the next two years and that the agency would benefit from opportunities to win referred business from across the group.
Loewy’s existing companies include Speed, Epoch Design, Seymour Powell, The Team and Williams Murray Hamm.
Those brands will now sit alongside Writtle’s existing portfolio of businesses, which include 20|20, Arken, Beyond Communications, Creo Retail Marketing, Maglabs and Magnet Harlequin. The newly combined group will keep the Loewy brand name.
Loewy grew quickly in the years leading up to the global financial crisis, making numerous acquisitions as it targeted a stock market floatation. However, the group become overburdened by debt and suffered a number of years of poor financial performance.
The group is understood to have lost £31m in the three years to 31 December 2009, largely due to write-downs related to acquisition costs.
Speed Communications was created in 2009 through the merger of the five Loewy PR brands; BMA Communications, Custard, Lighthouse, Mantra and Rainier.