NEW YORK: Financial Dynamics has agreed to be acquired by the business consulting firm FTI for $260 million.
The deal was announced Monday morning. The companies said that FD will operate as a separate unit within FTI.
In a conference call, FTI management said that they chose FD because of its extensive set of international offices, access to C-level management among top global clients, and the overall growth potential of the communications field. The move will offer many opportunities for FTI to cross-sell its own consulting services to FD clients and vice versa, and allow FTI to expand internationally without having to open brand new offices where FD is currently located, they said.
FTI president and CEO Jack Dunn said in a conference call that FD boasted profit margins "that we believe are among the highest in their industry." He added that joint teams from FTI and FD had already started pitching services together to major clients.
Dunn noted that most global PR agencies were not strong in the financial communications field, and most boutique financial communications firms are not strong internationally. FD was the only agency that offered both elements, he said.
FD's top management is slated to stay on with the agency. Dennis Shaughnessy, chairman of FTI's board, said that FD's top three executives, including US CEO Declan Kelly, had all signed new five-year contracts, which also included two-year noncompete clauses.
Shaughnessy pegged the $260 million price at about 7.8 times FD's earnings before interest, taxation, depreciation, and amortization (EBITDA).
Advent International, the private equity firm that currently owns part of FD, will receive its portion of the sale price in cash. The 140 FD management shareholders who own the rest of the company will receive cash, stock, and other financial considerations.
"We feel that we are acquiring a partner in FD," Shaughnessy said.