NEW YORK: Stagwell Group, the investment advisory firm founded by former Burson-Marsteller CEO Mark Penn last summer, has taken an investment in Finn Partners.
There will be no management or operational changes at Finn Partners as a result of the deal, though Penn will join the agency’s board alongside founding managing partner and CEO Peter Finn, his son and managing partner Noah Finn, and his sister and managing partner for CSR and social impact Dena Merriam.
The preferred stock purchase has future conversion rights to a minority investment in Finn Partners, the organizations said in a statement. Finn Partners and Stagwell Group did not release additional financial details about the deal.
Peter Finn said he had been planning to bring on a minority investor that would fuel the firm’s expansion into new geographies and industry sectors. Finn noted that he and Penn attended the same high school, and he has known the former Burson chief and pollster for more than four decades.
"We wanted to make sure we were bringing on a minority investor that would not force us to change," Finn said, referring to his firm’s management and culture.
In terms of possible expansion areas, Finn noted, "We don’t have a presence in Asia-Pacific, and that’s a problem I’m working on solving, and we need to be larger in Europe."
Finn Partners has made several acquisitions since launching in 2011. It acquired Washington, D.C.-based Greenfield Belser in July, and bought both DVL Public Relations and Advertising and Seigenthaler Public Relations, both in Nashville, Tennessee, at the start of 2015. In fall 2014, it bought U.K.-based technology agency Johnson King and gabbegroup’s health and education practices. In 2013, Finn also acquired Widmeyer Communications and Healy & Schulte, among other deals.
Finn Partners had global revenue of nearly $72 million in 2015, with the lion’s share of that number, nearly $67 million, coming from the U.S.
Penn stressed the importance of adding a PR firm to Stagwell’s roster.
"I think that earned media in its various forms is in fact becoming more important in today’s world, where the paid ad is only one of many tools that gets deployed," he said. "Our goal is to have every spoke in the marketing wheel."
The two organizations are also planning to roll out a jointly owned agency called Wye Communications, which will serve as a conflict shop for clients with personnel in both New York and Washington, D.C. Stagwell will have a controlling interest in Wye.
The leadership and organizational structure of Wye has not yet been determined. Stagwell partner Jay Leveton is overseeing the organization of the group.
Finn said Wye is not being created as a conflict shop for any specific client. Penn noted that it will likely serve clients in the brand and consumer spaces and could work closely with SKDKnickerbocker, the public affairs firm acquired by Stagwell in October of last year.
Since launching Stagwell Group last June, the group has also acquired National Research Group and New York-based digital creative firm Code and Theory. It also took a majority stake in PMX last month.