ATLANTA: After a barren six months in which the PR industry saw no major acquisitions, Edelman CEO Richard Edelman announced last week that he had snapped up The Headline Group in Atlanta.
The deal will help vault Edelman's once struggling local office into the number-five position in the market. The outpost will be further strengthened by the relocation of the firm's corporate reputation management practice to the Atlanta office, headed up by GM Bob Kornecki, who is assuming the new role of global practice leader (see p.5).
Claudia Gaines Patton founded The Headline Group 20 years ago, and has rebuffed numerous offers to buy her firm. She cited Edelman's status as an independent agency - setting it apart from the other top-10 firms that are owned by the big holding companies - as the attraction. "We both have heritages of consumer marketing, and we're both very entrepreneurial," said Gaines Patton, now GM/EVP of Edelman Atlanta.
In recent years, The Headline Group developed into a solid top-10 competitor, reaching the number-eight position in the Atlanta market, according to the PRWeek/Council of PR Firms 2002 rankings.
By contrast, Edelman's presence in Atlanta has been lackluster since it opened an office in the city in 1994. Absentee management left the shop rudderless and non-competitive until 15-year veteran Bob Kornecki was named GM in 2000.
Edelman said that the charges of a weak presence there have been a "fair assessment." He cited Atlanta's stature as the third-largest center of Fortune 1,000 headquarters as the attraction for his purchase.
Market economics also played a role in this decision. "We could not have made this move in the '90s. The size of the deal made it lucrative," he said. "I think it shows the virtue of being a private company in a downturn."
Matt Harrington, president of Edelman's Eastern division, said the firm intends to develop its Southeast network with Atlanta as the hub, employing a model he used to develop the Western market.
With this acquisition, Edelman strengthens its position with Southern Company and gains The Attorneys Title Insurance Fund, Char-Broil Grill, Head, and Tiffany & Company, among other clients.
The last acquisition of a major agency was in April, when Brodeur Worldwide snapped up Fitzgerald Communications.