Communications giant WPP is believed to be poised to acquire City
financial PR firm Buchanan Communications in a deal potentially worth up
to a maximum of pounds 15 million over five years. Buchanan has acted as
WPP’s financial PR consultant for over a decade.
The deal, likely to be announced shortly, is understood to include a
down payment of pounds 4 million based on 1996 post-tax profits of about
pounds 600,000 - a multiple of 6.8. The total of up to pounds 15 million
is based on post-tax profits growth of 20 per cent a year. The eight
directors, led by chief executive Richard Oldworth, will have a
five-year earn out period.
Ad agency Abbott Mead Vickers had earlier been tipped to acquire
Buchanan on broadly the same terms as the WPP deal, but over a lower
WPP, led by chief executive Martin Sorrell, already owns Hill and
Knowlton and Ogilvy Adams and Rinehart, but has no specialist UK
financial PR agency.