(Bloomberg) -- Roland Rudd was in attendance for Prime Minister Keir Starmer’s victory speech last month. The event at the Tate Modern combined two of his interests: chairing the charity that runs the gallery, and high-level politics.
The public relations executive, 63, has made a career out of such ties, via a contacts book that extends across UK politics and business. This week, the value of the communications company he built over three decades, FGS Global, jumped to $1.7 billion after advertising group WPP Plc agreed to sell its controlling stake to private equity firm KKR & Co.
FGS’s network of global partners retain a 26% stake in the firm, and Rudd is among the largest shareholders in this group. Overall, FGS’s valuation is up from $1.43 billion in 2023, when KKR took a minority stake. It already advises about a quarter of the FTSE 100, with hopes of expanding into more services and, in turn, higher potential client fees.
As well as making Rudd and his team wealthier, the latest transaction highlights a flurry of dealmaking interest in the PR industry, which ranges from coaching executives on media interviews to buffing a company’s image for a stock market debut and crafting responses to scandals.
In 2019, CVC Capital Partners bought a stake in PR agency Teneo, which in turn bought rival Tulchan last year. Huntsworth, the owner of PR firms including Citigate Dewe Rogerson, was acquired by Clayton, Dubilier & Rice in 2020. Byron Trott’s BDT Capital Partners became a shareholder in Brunswick Group in a 2021 deal that valued the PR firm at about £500 million ($637 million at current rates).
Claire Enders, the founder of research firm Enders Analysis, said there was likely to be more consolidation within the industry. “American companies feel uncomfortable dealing with small companies, therefore getting bigger is something that seems to be somewhat inevitable,” she said. FGS already has “quite an advantage” with its global reach, Enders added.
For Rudd, this latest deal cements the remarkable rise of a former financial journalist who launched the business, then named Finsbury, in 1994. His first clients included Roger Carr and Nigel Rudd at Williams Holdings, a conglomerate that’s since broken up. Both went on to lead some of Britain’s other biggest companies.
Global Expansion
As Finsbury quickly grew, Rudd sold most of the business in 2001 to WPP, then run by Martin Sorrell. The transaction made Rudd £40 million, according to reports at the time. Further consolidation followed, with Finsbury merging with US agency Glover Park Group and Germany’s Hering Schuppener in 2020, then adding WPP stablemate and deals specialist Sard Verbinnen & Co. to the group in 2023.
FGS Global has also opened new offices over recent years, including in the Netherlands and France, and overall it now has 1,400 staff in close to 30 locations. Its current projects include one of the biggest IPO prospects of the year, advising on fast fashion brand Shein’s preparations to sell shares in London.
Throughout it all, Rudd has remained the key figure. From the firm’s office just off the Strand in central London, he’s worked on global, politically sensitive deals including AstraZeneca Plc’s defense when Pfizer Inc. tried to buy the British drugmaker in 2014.
It was also where Rudd held meetings as part of the ill-fated People’s Vote campaign to keep Britain in the European Union during the 2016 referendum. His sister, Amber Rudd, would later resign from Boris Johnson’s government over the way Brexit was handled.
More Deals
By buying FGS, KKR is betting that it can continue to grow the business, and find a profitable exit in the coming years. Rivals such US-listed FTI Consulting Inc. offer a blueprint for expansion into new areas such as restructuring or forensic accounting.
With initial public offerings and M&A scarce over the past couple of years, FGS has already grown its reach into public policy and regulatory advice, along with crisis management.
FGS now aims to add to the wave of consolidation with more bolt-on deals, according to one person familiar with the matter, who asked not to be named discussing strategy. About 60% of the company’s work is in the US, and in future about a third of all FGS clients want to get all their advice globally from the same agency, they said.
FGS charges on average £50,000 a month to FTSE 100 clients, according to the person. Expanding the advice it offers could increase the total amount it could charge.
--With assistance from Benoit Berthelot and David Hellier.
©2024 Bloomberg L.P.
