PR M&A activity drop in the UK unlikely to be long-term

Research from Results International says that despite a slight drop in M&A activity in the UK’s PR sector, this isn’t likely to be a long-term trend.

The M&A adviser shows that despite there being a rise to 14 deals worldwide in Q1 from Q4 last year, deal volumes in the UK fell from 22% of global M&A in 2016 to 14% in Q1 2017.

But, there is a caveat. Results International explained: “Discussions with buyers suggest that this is due to fewer of the larger, scaled PR assets in the UK coming up for sale this quarter rather than it being indicative of any long-term trends.”

There have been eight repeat acquirers of PR agencies since the beginning of Q1 2016, with WPP making three purchases and other multiple acquirers including IPG, W Communications and Waggener Edstrom.

The research also highlighted that M&A activity in marcoms sectors that share some of PR’s territory continues to thrive, with nine deals in Q1 2017 for content businesses and five involving social media agencies.

Keith Hunt, managing partner at Results International, commented: “It’s not just the trade buyers and major marcoms groups that are looking to invest in PR: management consultancies are keen to reinforce their links with the C-suite and PR is still seen as one of the best ways to get in front of the world’s most senior leaders.

“The traditional PR buyers themselves are looking for agencies with scale, size and client commitment, but also for those with a more integrated offering, hence the increasing interest in content and social media businesses. Yet there’s no doubt that appetite remains for investment in PR businesses both niche and generalist. We wouldn’t be surprised to see some major deals in this space over the coming months.”