Publicis, based in Paris, is the holding company for communications firms across advertising and PR disciplines. Its PR agencies include MS&L, Publicis Consultants, and Freud Communications.
Kekst, founded in 1970 and headquartered in New York, has been involved in some of the largest M&A deals of recent years, including Kohlberg Kravis and Roberts' acquisitions of TXU and First Data, and consistently ranks high on the mergermarket league table. The firm is currently advising Anheuser-Busch in the unsolicited takeover bid from Belgian brewer, InBev. PRWeek also included Gershon Kekst on its 2007 Power List, published in October. The firm has a long-standing relationship with Publicis with the two organizations working together on acquisitions and collaborating on clients.
While Publicis may not be that well known for its financial work in the US, the company has financial communications operations in London and France, and Publicis Consultants has experience in areas such as crisis management. In the release statement, Maurice Lévy, chairman and CEO of Publicis Groupe, highlighted the “depth of professional capability” and “future growth potential” that the Kekst acquisition allows.
“We gain several things,” Lévy told PRWeek on a phone call from Paris. “We were already partnering with Kekst, but [by] working more closely together, we can handle clients on a global basis. For us, we can offer clients services from Kekst.”
Lévy said that Kekst would remain an autonomous entity within Publicis.
“We are used to protecting, nourishing, and cherishing the autonomy and culture of each of [our] operations," said Lévy. “We believe, in protecting that autonomy, we gain a lot. People have the feeling that they remain in their own culture and way of operating while at the same time [reap] the benefits of the links of the Publicis Groupe. Kekst and Company and MS&L will be side by side and the two of them will be absolutely autonomous. As a principle, they will work completely separately to avoid conflicts.”
While Kekst was not looking for a buyer, the acquisition has opened the door to new opportunities to grow the business, according to Jeffrey Taufield, senior partner at Kekst.
"All the pieces of a strategically meaningful transaction fell into place creating an opportunity that seemed right for us," Taufield said. "Clearly there was no imperative to sell given that our business is doing extremely well, but felt if we're going to do it, we should do it from a position of strength, which we believe is the case. For example, our alliance with Publicis will enable us for the first time in our history to seriously examine the potential for geographical growth should we choose to do it and enable us to service our clients more globally as well as more locally."
Taufield adds that there are no staff changes expected as all 30 partners at the firm, including Gershon Kekst, have signed long-term employment agreements with an initial duration of three years. Taufield said the firm has a history of staff longevity; 75% of the team has been on staff for over 10 yrs, 33% over 20 years, and all five founding partners remain active.Mark Hass, global CEO of MS&L, expressed excitement about getting to know his new PR counterparts and acknowledged the differences between the two despite their shared PR focus.
"Kekst is a different kind of firm from MS&L," he said. "There's not a lot of overlap so that suggests to me that there will be a lot of opportunities to work together."
Lévy said that he would next be making a trip to New York to meet with Kekst.
“I've known Gershon for 20 years; we've built a [strong] relationship,” said Lévy. “The first step will be that I'm going to say hello to all of my new friends.”
Financial details of the transaction are undisclosed.