WASHINGTON: Hager Sharp has bought the Washington DC office of Lipman Hearne, which included its public affairs practice.
The deal is Hager Sharp's first acquisition in more than two decades. It brings to an end six months of conversations about a possible purchase.
For Hager, the deal will expand its clientele from primarily including federal entities. Financial terms of the acquisition were not disclosed.
“We don't see the federal budget growth rate over the next 20 years being what it was over our first 40 years in business, so diversification was necessary,” said Garry Curtis, Hager Sharp's president and CEO.
In 2012, the firm saw a 13.6% drop in revenue to $7.4 million, according to PRWeek's Agency Business Report.
Federal communications contracts have been increasingly hard to come by in Washington in recent years. Just last month, the Centers for Disease Control and Prevention said it cancelled two seven-figure comms RFPs due to lack of funding. In May, Ogilvy said it was cutting its DC staff due to a slowdown in federal money.
For Lipman Hearne, the deal “allows us to focus on comprehensive marketing solutions to nonprofit organizations and educational institutions and ensures that our public relations clients are well-served by Hager Sharp,” president and CEO Rob Moore said, in a statement.
He added that the decision to sell the company's 12-year-old public affairs practice followed a strategic review of the firm's capabilities and determination of what it should focus on. Once the decision was made to split the practice, Hager Sharp seemed like an ideal home due to its client focus and corporate culture.
Clients inherited by Hager Sharp include the Robert Wood Johnson Foundation, AARP Foundation, and the Carnegie Institution for Science, Curtis said.
Lipman Hearne will continue to provide some support for the accounts as well as to ensure continuity, Moore said. The two firms will also look for opportunities where they can jointly seek new business.
Jim Healy, who served as MD of Lipman Hearne's Washington office, will join Hager Sharp as an EVP, sharing management responsibilities with Hager Sharp EVPs Debra Silimeo and Lynne Doner Lotenberg.
In total, eight Lipman employees will move into Hager Sharp's office over the next two months, Curtis said.