PR Leaders expect fewer acquisitions in coming months

The PRCA PR Leaders' Panel is predicting that the current economic climate will see fewer acquisitions by larger agencies but more mergers and acquisitions among small and medium size agencies. 61% of respondents expected fewer acquisitions by larger consultancies while 67% of respondents are expecting an increase in mergers between small and medium sized organisations.

Steffan Williams of Capital MS&L argues “When markets are high, small firms want to sell and when markets are poor, big firms want to buy!  It's all about valuation… as ever.”

Francis Ingham, PRCA Director General generally agreed but cautioned “Borrowing is expensive at the moment and while the PR market remains buoyant, this means that small companies risk being undervalued if they sell in the current climate. At the same time, rising operating costs will encourage smaller consultancies to try to make savings on overheads such as office space and accountancy costs. Many of the smaller consultancies also specialise in one sector and partnering with a consultancy in another sector can spread the risk of a possible tightening in the market.”

- ENDS -

About the PRCA PR Leaders' Panel

The PRCA PR Leaders' Panel is made up of managing directors of members of the PRCA (Public Relations Consultants Association), the UK trade association that represents the PR industry in the UK.

QUESTIONS

How will the current economic climate see large firms behave?

Same number of acquisitions - 11%

Fewer acquisitions - 61%

More acquisitions - 28%

Will the current economic climate see a change in the number of mergers among small and medium size companies?

Same number of mergers - 11%

Fewer mergers - 22%

More mergers - 67%

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