The survey, targeted at agency decision-makers, initially looked at 1,052 PR companies. Sufficient information to be able to form an opinion was available on 432 firms - which form the subject of detailed analysis.
Acquisitions and mergers manager David Pattison says it was the first time his firm has surveyed the PR industry, though for many years it has provided the same service for counterparts in advertising.
Rather than eyeing the profile of the market as whole, the aim of the research, based on Companies House files, was to provide both a profile and a current and future valuation of the 432 companies identified.
The company will provide a breakdown of where agencies stand in the market, will help identify potential buyers to the exposed, and will spotlight potential targets for predators.
Pattison says the survey has come at just the right time for a heavily fragmented industry dominated by smaller players, with many suffering fee income and profitability slumps as a result of both the sector and the wider economy's downturn.
'I use the monopoly board analogy,' he says. 'Everyone's going round the board and if you don't buy, someone else will.'
The pressure to consolidate is exacerbated by the scarcity of big acquisitions hitting the market. Of the 432 firms surveyed, only 101 are considered acquisition prospects while 229 are considered potential buyers. Of the 101 only seven are agencies with a turnover of £10m or more, while 15 similarly-sized agencies are classified as potential buyers.
Most at risk according to the survey are 138 companies considered 'financially exposed' - 68 of those have a 'buy' rating. Of the 262 'high-strength' companies identified, 33 are 'buy' options while 229, unsurprisingly, are more likely to be the buyers.
But 50 per cent of the viable purchasers across the board are drawn from the ranks of companies with turnover of £1m or less. Only a quarter of them are companies with a turnover of £3m or greater. And during research for the survey Patisson says it became clear there were a large number of successful agencies with 'baby boomer' director/shareholders in their 50s and considering retirement, who may well be prepared to accept a bid for their companies.
M&A specialist Alastair Gornall - the founder and MBO-seller of Consolidated Communications now running transactions facilitator Madsen Gornall Ashe - says the market is simmering in anticipation of a fresh wave of activity.
He claims his company is talking to around 20 agencies a week - mainly about M&A work.
Gornall cites a 'massive interest in partners' but says many companies are looking three or four years down the line before selling and are looking to increase value in the meantime: 'It's not the best time to be selling, unless you're very specialist, as values have dropped considerably during the past year.'
But mergers offer opportunities in terms of synergies that can prove irresistible. For any mid-sized agency that wants to double fee income ahead of a trade sale, merging with a similar-sized operation offers the only realistic possibility of doing so in the current climate.
And Gornall says the trend will be increasingly towards management buyouts rather than straightforward M&As.
PR agencies have traditionally been reluctant to hand on their businesses to family but MBOs, such as that pulled off by Consolidated and before that Freud Communications, offer a sense of creative continuity that, the argument goes, can often be lost on selling to a major. The motivational effect on a stick-owning management team is touted as another bonus.
The preference is well illustrated by last week's MBO at Lexis Public Relations, when founders Bill Jones and Tim Adams were bought out by five agency directors in a deal worth close to £5m, despite offers from other major marketing groups.
Chris McDowall, the former PRCA director-general, is now a partner at creative service firms business accelerator Pembridge Partnership. Pembridge wa so keenon the deal it advised on that it took a ten per cent equity stake in the venture. McDowall also predicts a rise in the extent of M&A activity but, like Gornall, says MBOs will become increasingly common as their attractiveness to culture-keen CEOs becomes more apparent.
And while Pattison refuses to name the firms he has highlighted as targets or potential buyers, McDowall offers one teasing clue as to which firms are likely to sell as the upswing gathers pace: 'The creative companies. The ones that win prizes. It's no coincidence the same names keep cropping up again and again.'