FGH parent company WPP will own 57.4 per cent of the new entity. US private equity firm Golden Gate Capital, which has a 40 per cent stake in Sard Verbinnen, will retain a small ownership. FGH employee shareholders will hold 25.9 per cent ownership and nearly 40 per cent of the agency's employees will own equity in the firm.
The deal values the combined business at $917m.
FGH chief executive Alexander Geiser becomes CEO, with Finsbury founder Roland Rudd, Glover Park Group founder Carter Eskew and Sard Verbinnen co-founder George Sard named co-chairs. Fellow Sard Verbinnen co-founder Paul Verbinnen becomes co-chair, North America, alongside Mike Feldman.
Other senior figures include Andrew Cole, deputy global CEO as well as co-CEO of North America with Joel Johnson, Paul Kranhold and Winnie Lerner; Faeth Birch, CEO of UK, Middle East and Asia; and Brigitte von Haacke, CEO of Europe. In addition, Sanjay Bhutiani will be global CTO, Randal Bridges will be global CIO, Ajay Junnarkar will be global CFO and Sydney Neuhaus will be global COO.
The merger is expected to be completed in Q4 2021, according to a statement, and the combined entity will operate under a new, unannounced name starting in 2022.
The combined firm will work across five integrated offerings, supported by specialist teams providing research and insights, digital strategy and design and creative capabilities, the new group said. The five offerings are crisis and issues management, public policy and government affairs, financial and transaction communications, corporate reputation, and transformation and change.
The new agency would be ranked 10th in the PRWeek Agency Business Report table of the biggest PR agencies in the world for the 2020 calendar year, ahead of corporate and financial comms rivals Brunswick and FTI Consulting.
PRWeek understands that FGH was not primarily attracted to Sard Verbinnen for scale, but rather sees the benefit of adding the agency's expertise in M&A and crisis work, in particular. New York-headquartered Sard Verbinnen also has little significant geographical overlap with FGH. Outside the US, the former operates only small offices in London and Hong Kong.
Sard Verbinnen, which has a global workforce of about 200, topped the Mergermarket table for the number of M&A deals handled globally in 2020, and was second in the table by deal value. As a combined entity, FGH - which itself launched at the start of 2021 via the merger of WPP stablemates Finsbury, The Glover Park Group and Hering Schuppener - was third by deal count and fourth by deal value.
Golden Gate Capital's investment in Sard Verbinnen in 2016 reportedly valued the agency at $150m. In September last year, Sard Verbinnen announced it had acquired UK-based Oakhill Communications, taking the agency's UK workforce to 25 at that point.
In a statement today, Rudd and Eskew said: “Our clients operate in an increasingly complex world with diverse stakeholder interests. To generate growth, open markets, shape policy and attract capital, companies need to seamlessly communicate to more audiences and across more markets than ever before. This merger brings together the most accomplished communications professionals, operating within a global firm that will have the expertise and experience to deliver reputation advisory services to address critical c-suite concerns.”
Sard and Verbinnen said: “This is a combination of two successful, growing firms with strong track records, complementary leadership positions, deep entrepreneurial spirits, cultures of collaboration and integrity and a heritage of delivering for our clients at their most high-pressure moments. Our success has been driven by our teams’ tireless commitment to supporting our clients and one another and upholding high standards of excellence in all that we do.
"We are particularly excited that the combination will enable us to provide additional professional development opportunities and establish a new generation of employee-owners in the combined company.”
WPP chief executive Mark Read said: “The demand for board-level strategic advice on a growing range of financial, reputational and social issues has never been greater. As the reputations of companies and their brands become ever more closely linked, our leadership in this area is a core part of our offer as we support our clients’ continued transformation.
"WPP is delighted to support the ambitions of the leadership teams of Finsbury Glover Hering and SVC in creating a powerhouse in strategic communications, with the expertise, scale and footprint to provide unparalleled service to global clients.”
Neale Attenborough, an operating partner at Golden Gate Capital, said: “We are very excited about this partnership, especially as it creates the pre-eminent firm in the strategic communications sector. Golden Gate Capital will remain an investor in the combined company.”
Sard Verbinnen is FGH's second acquisition this month, following its move for US public affairs firm the Harbour Group. FGH has also announced high-profile appointments in recent weeks including former UK Home Secretary Amber Rudd, and Craig Oliver, former director of communications in 10 Downing Street under David Cameron.
FGH's move for Sard Verbinnen, which was initially reported in the Financial Times last month, is the latest in a series of significant transactions involving global corporate and financial comms agencies.
In the summer, Brunswick agreed to sell a 10.7 per cent stake to US merchant bank BDT Capital Partners, valuing the business at about £500m. Teneo secured new backing from CVC Capital Partners in 2019.
Other notable transactions have included LDC, the private equity arm of Lloyds Banking Group, becoming the new majority owner of Instictif and later taking a minority stake in Headland. Another private equity company, CD&R, snapped up Grayling and Citigate owner Huntsworth in 2020.