Unity sells majority stake to marketing services group

Unity has a new majority owner, with acquisitive marketing services group Selbey Anderson buying a majority stake in the London-based PR agency.

Unity sells majority stake to marketing services group

Founder and chief executive Gerry Hopkinson (pictured) will continue to lead the agency and retains a minority stake. Other terms of the deal, including the sale price, have not been disclosed.

Unity becomes Selbey Anderson's third PR agency acquisition, following Flagship Consulting and Greentarget, since it was founded in 2018. The group, which is privately funded and has not revealed its founders, has also bought digital agency Orckid and founded two firms: Drum Horse, a business services provider for creative agencies, and Sharper, a b2b marketing shop.

Hopkinson said: “From the outset it was clear that Unity and Selbey Anderson are a great fit. They value our evidence-based approach and focus on creating culturally relevant campaigns, and we were very impressed with their vision of creating a network of like-minded agencies supported by market-leading back-office operations and management expertise to ensure continued growth. When we started, a human-first approach to comms was considered radical. With the rapid digital, cultural and social transformation we are witnessing today, it now seems like an idea whose time has come.”

Unity's headcount and revenue at the time of the deal have not been disclosed. Redundancies have occurred, although the senior team remains in place and Hopkinson said Unity is "in the process of building the team now".

He told PRWeek: "Like most agencies in the country, we had some impact from coronavirus in terms of campaigns being hit and budgets being hit, and we've had to work with clients to deal with that together. The good news is we're coming through the other side of that… Q4 is looking much better, thankfully."

Asked the extent to which the sale was linked to recent trading conditions, Hopkinson said: "It would be wrong to say that it didn't figure in the thinking, but by no means was it the decisive factor.

"I've been mindful for a couple of years that in order to take Unity to the next level, in order to grow in a way I want the business to grow, we need to seek investment, we need to do a deal of some sort.

"Things just came together in the right way. We've had a number of conversations with people over the years but this one felt right, primarily because there was such a good rapport and a shared vision of what a modern consultancy needs to be and needs to do. We just saw eye-to-eye from the outset."

Hopkinson said there are "absolutely" plans to work with Unity's new sister agencies. "Exactly how that's going to work, we're going to figure out in the months to come. But for sure, a big part of the benefit of doing this deal is we're going to be able to extend our services and what we do for clients directy – within Unity primarily, but also being able to work with other agencies in the group."

Selbey Anderson chief executive Dominic Hawes said: "2019 was about building capability in business-to-business marketing communications and revenue enablement. 2020 was going to be all about adding both brand marketing and communications capability, but COVID-19 got in the way of that. Until now.

“Unity has an amazing pedigree. You don’t win that many awards without being quality to the core. Meeting Gerry and his team reinforced what we already knew by reputation, that this was a top-class agency. There aren’t that many great communications agencies who understand nuance and the tricky art of influencing behaviour. We saw it right away in Unity and knew that we’d have an exciting future together.”

Foundation

Unity was founded in 2005 by Hopkinson and Nik Govier and over the years gained a reputation for strong campaign work. It was named Consultancy of the Year in the 2016 PRWeek UK Awards, where it won six awards in all. Unity's 2014 'Follow the Fairies' Christmas campaign for Marks & Spencer was named among PRWeek UK's 10 best PR campaigns of the 2010s in a special feature last year.

Govier left Unity in 2018, later co-founding the agency Blurred.

Since then, Unity has added new services including brand consulting, content marketing, employee engagement, CSR, public affairs, and issues and crisis management.

Last autumn, Unity promoted head of consulting Samantha Losey to the new role of managing partner, as it looked to transition from a consumer-focused comms agency to a "hybrid consultancy model" that's "able to solve brands' problems in completeness".

Wins in the past year include a six-figure brief with Italian ceramic wall- and floor-coverings manufacturer Iris Ceramica, and a brand strategy and new product development account with satellite TV company Freesat. Its other clients include AXA, Open Reach and Bayer Consumer Health.

'Buoyant' M&A market

Dominic Hawes-Fairley described the current market for agency acquisitions as "really buoyant". "We’re seeing lots of agencies across the communications and promotional mix exploring options as part of a strategic planning process, not just because of the COVID-19 crisis," he stated.

Hawes-Fairley said acquisitions generally fall into one of three segments:

  1. 'Strong survivors'. These are "agencies that had the management, client list and cash reserves to weather the worst of the lockdown". "All three factors have been important, but clients – or more particularly client sectors, have been key. These agencies have typically seen revenues dented by 10 per cent to 20 per cent, but prudent management and early action has meant 2020’s bottom line isn’t far off 2019."
  2. 'Interesting revivers', which includes the majority of agencies. "They have been exposed to sectors that have cut dramatically, so revenues and profits have fallen, but because they had cash reserves they are still resilient. These agencies are operating on reduced everything, including profits, but they are still profitable."
  3. 'Rapid Decliners'. These are the "small number" of agencies that "had neither cash reserves nor resilient clients, and they are suffering really badly. They have no runway and when furlough ends in full, their future is in doubt."

He said Selbey Anderson is actively targeting 'strong survivors' and 'interesting revivers'. "The former delivers positive cash flow and the latter the opportunity of a strong rebound once we get to the other side of this crisis."

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