FGH chief predicts 'big two' in global corporate comms as sector 'grows up'

Alexander Geiser, soon-to-be CEO of the agency formed from the merger of Finsbury Glover Hering and Sard Verbinnen, says two corporate comms consultancies are likely to emerge as the dominant global players over the next five years.

Alexander Geiser: 'The opportunity that we have as a sector has never been greater'
Alexander Geiser: 'The opportunity that we have as a sector has never been greater'

Geiser told PRWeek the picture is likely to mirror sectors such as management consultancy, where McKinsey/Boston Consulting are the biggest players, or investment banking, where Goldman Sachs/Morgan Stanely are out in front. It will represent the corporate comms industry "growing up", Geiser argued, and he urged the sector to "rethink" some of its more "traditional ways".

PRWeek spoke to Geiser following confirmation today (Wednesday) of the imminent merger of FGH and Sard Verbinnen, which will create a new consultancy boasting a 1,000-strong workforce across 25 offices and annual revenue of around $330m.

He said both agencies are growing by double-digits and between them have added 100 employees since the start of the year. Both will "continue to hire and to grow".

The combined firm, which will be majority-owned by FGH parent company WPP, will work across five integrated offerings: crisis and issues management, public policy and government affairs, financial and transaction communications, corporate reputation, and transformation and change.

Geiser - currently chief executive of FGH - said: "There's just tremendous demand at the very top of the market to deliver exactly that type of strategic counsel which brings together the financial communications, the reputational, the social issues and political issues.

"All of that is coming together because their clients need it."

New ways

He said the plan is to build "the most bespoke but also entrepreneurial firm in our sector". Geiser pointed out that 40 per cent of the new agency's employees will be shareholders of the business, post-merger. He called this a "game-changer" for the industry.

"You wouldn't have seen that anywhere else in our sector, nor have I seen it anywhere. It really is an articulation of a true global partnership because we do need to go in new ways.

"We are creating 'the new' here, and I think if our sector wants to ascend, we do need to rethink some of the more traditional ways. We're very founder-dominated, very small shareholder-dominated, very central management [dominated]... we really need to grow up. We've decided our path is a global partnership and into that, only the best will fit."

He added: "We truly believe that our sector will grow up, it will ascend because what we do is becoming more important. And like in every other sector - if you look at McKinsey/Boston Consulting, Goldman/Morgan Stanely, Mercedes/BMW, whichever way you want to look at it, the next five years, essentially two firms will emerge as the leaders at the top of the market."

Geiser said the "opportunity that we have as a sector has never been greater than it is today, and it's upon us to seize it and turn it into reality".

IPO

A stock market flotation is planned for the new entity. Under the terms of the merger deal, Sard Verbinnen backer Golden Gate Capital, along with Sard managers who own shares in the group, can require WPP to buy out their stakes if an IPO or sale has not occurred by 1 January 2024.

Geiser said: "An IPO is something we are very seriously considering but it would be much too early to discuss that today. It's something for the future."

Sard Verbinnen, which has its headquarters in New York, has little significant geographical overlap with FGH outside the US. The former agency operates only small offices in London and Hong Kong. On the prospect of possible office consolidation, Geiser stated: "We will make those decisions in those cities respectively where we have mutual offices. In some situations, one side will co-locate with the other side, but we will co-locate over time as quickly as possible. But it may also mean that we need new space as teams get too big now, having said that."

Earlier this month FGH announced the acquisition of US public affairs firm Harbour Group. Geiser declined to discuss future acquisition plans, although it's understood that while small 'tack on' acquisitions would be sought, organic growth will be the primary focus.

He was cool on the prospect of opening offices in more countries, saying 99 per cent of the agency's client needs are focused on the areas in which it currently has a presence, in the US, Europe, the Middle East and Asia.

Asked about the challenge of recruitment, Geiser called on the industry to "be a lot more confident about how exciting the work is that we are offering", with those agencies that have a "seat at the table" able to "really change and influence outcomes".

Recruitment

"There are so many super-intelligent and communicative individuals out there - talent around the world who are absolutely interested in this sector. I'm a fan of seeing the positive and then making it happen and bringing new talent to our sector and winning them [over] to what we do, and thus expanding the total talent base.

"The challenge is on us to provide the environments that are meaningful from a content perspective or work perspective and also attractive from a financial perspective that we can be competitive with McKinsey or Goldman, and so forth."

He described WPP, which will have a 57.4 per cent stake in the new agency, as "absolutely supportive".

"The arrangement and the relationship we have with WPP as our majority shareholder is that we are living this entrepreneurial journey in, essentially, a joint venture spirit. They have been absolutely wonderful and professional in support of our ambition to grow this company because they believe in us."

The merger is expected to be completed in Q4 2021, and the combined entity will operate under a new, unannounced name starting in 2022. The deal values the combined business at $917m.

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