Teneo sells majority stake to CVC Capital Partners

Teneo has sold a majority stake to UK-based private equity firm CVC Capital Partners, as former majority owner BC Partners exits after four-and-a-half years.

The deal values Teneo - which operates in 12 countries, with a global headcount of more than 800 – at more than $700m (£552m), according to reports in the FT and the Wall Street Journal that suggest CVC paid $350m (£276m) for its stake.

The terms of the investment have not been disclosed. However, according to the FT, BC Partners will sell its stake of roughly 50 per cent to CVC, and Teneo’s management will also sell a fraction of their shares, giving CVC majority control.

A statement from Teneo suggests the company could return to the acquisitions trail. It made nine acquisitions during BC Partners’ tenure, although it has made none since 2017.

Teneo said the investment "will provide significant opportunity for the continued growth of Teneo's operations through organic investment and acquisition focused across its four operating segments: Strategy & Communications; Management Consulting; Risk Advisory; and Capital Advisory".

In a statement, BC Partners partner Justin Bateman said underlying earnings (EBITDA) nearly doubled at Teneo "both organically and through strategic acquisitions" during the period of BC’s involvement.

"Since our initial investment in 2015, Teneo has executed nine acquisitions, which have been instrumental in expanding its geographic footprint, broadening its service offerings and continuing to build the company's brand - positioning it as the leading global CEO and board advisory firm in the world," he added.

Teneo chairman and CEO Declan Kelly said: "We are very pleased to welcome CVC as our new private equity partner. The new partnership will enable us to further expand our operations around the globe to best serve the growing needs of our clients. I also want to thank the great team at BC Partners for their partnership and support of our business over the last several years."

Christopher Stadler, managing partner at CVC, said: "CVC is excited to be entering a new partnership with Teneo. We have been very impressed with the firm's growth since it was founded in 2011, as well as its dedication to going above and beyond to deliver for its clients around the globe. We are very much looking forward to working closely with the management team to help execute their ambitious growth plans moving forward."

The news comes seven months after the company removed the sub-branding from all its global operations, making Teneo the name used for the business worldwide with the phasing out of established agency monikers.

In the UK, this meant removing the Blue Rubicon name. The UK operation had been called Teneo Blue Rubicon since 2016, when it amalgamated London agencies Blue Rubicon, StockWell and Pendomer Communications - all acquired in the previous year – into one operation.

The UK business generated revenue of an estimated £45m in 2018, according to PRWeek UK’s Top 150 Consultancies table, employing around 240 people at the year end. In the UK, the firm represents 24 of the FTSE100, with stellar clients including Tesco and RBS.

Teneo was founded in 2011 by former Financial Dynamics US chair and CEO Kelly and Doug Band, the former chief counsel for ex-US President Bill Clinton, as well as Paul Keary, a former senior MD of FTI Consulting.

The group has grown rapidly in recent years off the back of acquisitions and its positioning as a global advisory firm to top business leaders. It operates across five 'pillars': strategy, financial, political, political risk, and campaigns.

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