WPP (NYSE: WPP) today announces that its majority-owned
subsidiary, Finsbury Glover Hering Corporation (“Finsbury Glover
Hering”), and Sard Verbinnen & Co (“SVC”) have reached
agreement on the terms of a merger to create the world’s leading
strategic communications firm advising clients in navigating
critical opportunities and challenges (the “Transaction”).
The new firm will help clients achieve their missions and
realise their business goals, with approximately 1,000
professionals operating from 25 offices in Asia, Europe, the Middle
East and the United States, including its global headquarters in
New York. Pro forma combined 2020 revenue was more than $330
million.
Over the past three decades, both Finsbury Glover Hering and SVC
have built impressive reputations advising clients during their
most significant transformational events. The firm will be a leader
in all aspects of strategic communications, including government
affairs, corporate reputation, crisis management, and
transformation and change, as well as the leading force in
financial communications worldwide, with strong experience and
expertise in M&A, private equity, IPOs, SPAC transactions,
shareholder activism and restructurings.
The new firm’s professionals have deep sector knowledge within
rapidly growing industries such as Health, Food and Agriculture,
and Renewable Energy, as well as expertise in Diversity, Equity,
and Inclusion (DE&I), Environmental, Social and Governance
(ESG), litigation and regulatory communications, and
cybersecurity.
Senior professionals from Finsbury Glover Hering and SVC will
lead the new company. SVC’s George Sard will join Finsbury Glover
Hering’s Roland Rudd and Carter Eskew as Co-Chairmen. Alexander
Geiser will serve as Global CEO, Ajay Junnakar will serve as Global
CFO, Sydney Neuhaus will serve as Global COO and Andrew Cole as
Deputy Global CEO.
Completion of the Transaction is conditional on the satisfaction
or waiver of certain conditions, including the expiration or
termination of the waiting period under the U.S. Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended. The Transaction is
expected to complete in Q4 2021 and the combined company will
operate under a new name starting in 2022, to be announced in due
course.
Finsbury Glover Hering Co-Chairmen Roland Rudd and Carter
Eskew said: “Our clients operate in an increasingly complex
world with diverse stakeholder interests. To generate growth, open
markets, shape policy and attract capital, companies need to
seamlessly communicate to more audiences and across more markets
than ever before. This merger brings together the most accomplished
communications professionals, operating within a global firm that
will have the expertise and experience to deliver reputation
advisory services to address critical c-suite concerns.”
SVC Co-Founders George Sard and Paul Verbinnen added:
“This is a combination of two successful, growing firms with strong
track records, complementary leadership positions, deep
entrepreneurial spirits, cultures of collaboration and integrity,
and a heritage of delivering for our clients at their most
high-pressure moments. Our success has been driven by our teams’
tireless commitment to supporting our clients and one another, and
upholding high standards of excellence in all that we do. We are
particularly excited that the combination will enable us to provide
additional professional development opportunities and establish a
new generation of employee owners in the combined company.”
Mark Read, CEO of WPP, said: “The demand for Board-level
strategic advice on a growing range of financial, reputational and
social issues has never been greater. As the reputations of
companies and their brands become ever more closely linked, our
leadership in this area is a core part of our offer as we support
our clients’ continued transformation. WPP is delighted to support
the ambitions of the leadership teams of Finsbury Glover Hering and
SVC in creating a powerhouse in strategic communications, with the
expertise, scale and footprint to provide unparalleled service to
global clients.”
Transaction Structure
The Transaction values the combined Finsbury Glover Hering-SVC
group at an equity value of $917m, and SVC at $303m. The
Transaction will be effected by a new company (“Newco”) which will
become the holding company for the combined Finsbury Glover
Hering-SVC group. WPP will convert its existing loan note in
Finsbury Glover Hering into shares in Finsbury Glover Hering, and
all shares in Finsbury Glover Hering held by WPP and by employee
shareholders (the “Finsbury Glover Hering Managers”) will then be
exchanged for new shares in Newco. WPP will subscribe in cash for
further new shares in Newco for $150m. Newco will then acquire SVC
from Golden Gate Capital and SVC employee shareholders (the “SVC
Managers”) in consideration for the $150m in cash (net of customary
adjustments) and the issue of new shares in Newco, representing
16.6% of the total issued share capital of Newco.
Following completion of the Transaction, WPP will remain as the
majority shareholder of the combined Finsbury Glover Hering-SVC
group, holding 57.4% of the total issued share capital of Newco,
with FGH Managers holding 25.9%.
The terms of the Transaction also provide for Golden Gate
Capital and the SVC Managers to have the option to require that WPP
purchases their shares in Newco in the event that an IPO or sale of
Newco has not taken place by 1 January 2024 or later (the “Put
Option”). The Put Option is exercisable on a staged basis over a
minimum period of 4 years from 2024 to 2028 at the earliest and is
at multiples of profit that are at a material discount to the
Transaction multiple. Existing put options, based on comparable
terms, held by the Finsbury Glover Hering Managers will be rolled
over into the new structure.
The Transaction is a Smaller Related Party Transaction under the
UK Listing Rules as certain Finsbury Glover Hering Managers are
directors of Finsbury Glover Hering and some of its subsidiaries
and therefore are related parties of WPP. As such, the Transaction
is subject to the requirements of the Listing Rule 11.1.10R.
The current directors of Finsbury Glover Hering, who are deemed
to be related parties of WPP, will together own 9.5% of Newco. No
Finsbury Glover Hering Manager (including the directors) will
realise the value of their shareholding at completion of the
Transaction nor are they expected to do so ahead of an IPO or sale
of Newco.
As at 31 December 2020, Finsbury Glover Hering had gross assets
of $426.8m and profit before tax of $53.5m, and SVC had gross
assets of $52.2m and profit before tax of $36.4m.
About WPP
WPP is a creative transformation company. We use the power of
creativity to build better futures for our people, planet, clients
and communities. For more information, visit www.wpp.com.
About Finsbury Glover Hering
Finsbury Glover Hering is a global strategic communications
advisory firm, headquartered in New York with over 800
multidisciplinary experts across the world’s major financial,
government, business and cultural centers. Finsbury Glover Hering
is a leader in crisis, corporate reputation, public affairs and
capital markets and M&A advisory, as well as an acknowledged
leader in boardroom communication counsel. The company was formed
through the merger of leading strategic communications
consultancies Finsbury, The Glover Park Group and Hering Schuppener
in January 2021. Finsbury Glover Hering serves its global client
base from offices in Abu Dhabi, Beijing, Berlin, Brussels, Dubai,
Dublin, Düsseldorf, Frankfurt, Hong Kong, London, Los Angeles,
Munich, New York, Paris, Riyadh, Shanghai, Singapore, Tokyo,
Washington D.C. and Zurich.
About SVC
SVC has for many years been the top global transaction
communications advisor on M&A, IPOs and SPACs – consistently
ranked as a leader in the North America and global M&A league
tables. SVC is also a leader in advising companies facing
shareholder activist campaigns, the preeminent firm in litigation
and crisis communications, and has advised on many high-stakes
situations around the world with particular areas of strength in
the US and Asia. Headquartered in New York, SVC has broad
capabilities across the U.S., with strong teams in offices in San
Francisco, Los Angeles, Chicago, Houston, Washington, DC, and
Boston, as well as in London and Hong Kong. A South Florida office
will open shortly.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211013005662/en/
Investors and analysts Peregrine Riviere } +44 7909
907193 Caitlin Holt } +44 7392 280178 Fran Butera (US) } +1 914 484
1198
Media Chris Wade } +44 20 7282 4600
Richard Oldworth, +44 7710 130 634 Buchanan Communications +44
20 7466 5000 wpp.com/investors
WPP (NYSE:WPP)
Historical Stock Chart
From Aug 2024 to Sep 2024
WPP (NYSE:WPP)
Historical Stock Chart
From Sep 2023 to Sep 2024