The agency was bought for £2.24m, some of which is deferred and contingent on future profits.
Waterfront will retain its name and 17 existing employees, based in offices in London and Brussels.
Waterfront MD Nicholas Finney will continue to head up the business reporting into Freshwater CEO Steve Howell.
Last month saw Cardiff-based Freshwater also acquire ten-year-old Leeds-based Lynx PR.
Freshwater has also released preliminary results showing profit before taxation for the year ended 31 August 2007 doubling to £0.92m from £0.44m in the previous year.