SEC chief 'very confident' Porta merger will go ahead; agencies could combine

The CEO of Italian PR group SEC is "very confident" the firm's proposed merger with Porta will take place, a process PRWeek understands is likely to see moves to combine the operations into one brand.

Fiorenzo Tagliabue: SEC and Porta are 'working very well' together
Fiorenzo Tagliabue: SEC and Porta are 'working very well' together

Fiorenzo Tagliabue spoke to PRWeek following the announcement that Porta and SEC have entered discussions about a potential merger, which would create a business with global fee income of around €80m and a significant roster of PR agencies, including Newgate, Publicasity and Newington. The combined operation would likely be among the top 30 PR agencies in the world by revenue, or possibly among the top 25, according to the most recent Agency Business Report from PRWeek.

SEC acquired a 19.3 per cent stake in London-headquartered Porta for £3m in 2017, in a move that saw the creation of a central marketing and new business function to focus on joint business opportunities.

SEC has until 5pm (UK time) on 7 May to either announce a firm intention to make an offer to merge, or to pull out. Approval by shareholders of both companies is also required.

Asked how confident he is that the merger will happen, Tagliabue told PRWeek: "Personally I’m very confident because I know my people and I know very well the people working in Porta with certain responsibilities. There is a good feeling with them. We share many doubts about the situation of the PR industry and about its perspective."

Tagliabue said he was unable to comment on whether there were plans to merge agencies within the group or make other specific changes following the proposed deal.

Porta executive director Gene Golembiewski told PRWeek: "Both companies have to do their own due diligence on the other. It will be a process, and part of that process will include looking at potentially a combined brand, but that remains to be seen."

However, a well-placed source said: "Of course we will progress on this project of merging. We will have a unique brand."

Tagliabue said SEC and Porta are "working very well" together, "because we [SEC] are deep-rooted in Europe and Newgate is a strong brand in the UK, Middle East and Australia".

He added: "We started to share some clients. For instance, our clients operating in countries where Porta is present… and the opposite – clients of the UK which need help in markets where we are. This first experience is quite positive.

"Having the same approach to the business, to the market, which is an approach of innovation, of great attention to the clients, and so on… we are able to share some experiences quite positively."

The combined operation would have a workforce of more than 550.

SEC reported revenue of €21m in 2017. Its 2018 figures have not yet been released but annual revenue is likely to be nearer €30m following recent acquisitions. Porta's 2017 revenue was £40.3m (€46.8m).

Last year Porta merged its Newgate and Redleaf businesses, creating a London-headquartered agency employing 235 people from 16 offices in seven countries.

SEC has been expanding internationally with a series of acquisitions – in Belgium (2013), Spain (2014), Germany (2015) and Poland (2017) – in addition to its UK activities. The firm acquired a majority stake in London-based public affairs agency Newington Communications in 2016, the same year in which it floated on the AIM stock market in London.

Most recently, in November 2018, SEC bought a majority stake in CLAI, the French agency founded by Eric Giuily, former global head of Publicis Consultants.

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