Lloyds Bank's private equity arm takes majority stake in Instinctif

Instinctif has a new majority owner, with LDC, the private equity arm of Lloyds Banking Group, replacing Vitruvian Partners as the PR agency's principle backer.

New team (left to right): Lawrence Dean, Tim Trotter and Tim Linacre
New team (left to right): Lawrence Dean, Tim Trotter and Tim Linacre

Instinctif has also announced the appointment of Tim Trotter, former deputy chairman of Weber Shandwick and founder of Ludgate Group, as non-executive chairman.

The deal marks an exit for Instinctif’s previous private equity backer, Vitruvian, after eight years. The sale process started around two years ago but was "paused" last summer, with potential buyers unwilling to meet the asking price.

Neither the price of the deal nor the size of LDC's stake have been disclosed. However, it is understood that around £20m had been sought for Vitruvian's 51 per cent stake in the London-headquartered corporate and financial comms agency, which employs more than 300 people in 12 offices.

LDC investment director Lawrence Dean now joins the Instinctif Partners Board as non-executive director, alongside Trotter.

In a statement, Instinctif, said LDC’s investment "will support the management team’s strategy to deliver growth across its international offices through client-centred, integrated and innovative communications services".

It said "recruitment of new talent across the firm will complement strategic growth".

The statement said Instinctif's fees from integrated client accounts now contribute to more than 30 per cent of group revenues.

It said 2019 has "seen a step up in new client wins and continued growth in its international retained client base". Recent new client wins include Google, SAP, TalkTalk, Zoopla and Randstad. Instinctif's offices are located in the UK, Germany, Republic of Ireland, Brussels, Dubai, South Africa, Hong Kong and the Greater China region.

LDC is no stranger to comms agencies, having previously invested in Blue Rubicon prior to its sale to Teneo. In May this year, LDC invested in MSQ Partners, owner of PR shop Smarts Communicate, among other marcomms agencies.

Tim Linacre, CEO of Instinctif Partners, said: "LDC’s investment is a clear validation of our people and our vision to build a truly integrated, strategic consultancy. It’s also a clear statement of our intent to win in our sector by continuing to build an innovative, relevant and modern business communications group. I am excited about our offer, which is delivering a string of impressive client wins, and the clarity of our leadership, strategy and ambition.

"LDC’s investment means we are well-resourced to grow our position as the home of integrated, strategic communications advice for boards and their executive teams."

Dean said: "The communications needs of the world’s major businesses are increasingly sophisticated. The team at Instinctif has built an integrated consultancy with the strategic and creative muscle to capitalise on those changing demands, whilst their people-first commitment makes the firm well-placed to compete for the industry’s very best talent."

Instinctif did not provide 2018 revenue figures for PRWeek's most recent Agency Business Report or UK Top 150 tables. However, PRWeek has previously reported that the agency generated global revenue of $50.1m in 2017.

News of the new investment follows a number of senior staff changes at Instinctif.

In July, Instinctif announced it had appointed Lucy Cronin, managing partner of its Dublin office, to head the global public policy practice, replacing Warwick Smith, who moved to a new advisory role after 12 years.

That followed shortly after the agency announced two managing partner promotions in its UK business and hires in its Corporate and Capital Markets team.

Meanwhile, in May PRWeek reported that Instinctif partner Giles Stewart had left the agency to join Buchanan, to build its financial services offer.

In June, Instinctif launched a new offering focused on environmental and social impact.

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