The British public relations group Brunswick has agreed to sell a minority stake to a US fund run by Warren Buffett’s banker Byron Trot. The transaction is valued at approximately 500 million pounds, and its chairman Sir Alan Parker was paid 70 million. GBP.
BDT Capital Partners, a Chicago-based investment and Commercial Banking Group operated by Trott, Will obtain 10.7% of the company’s shares through preferred shares that pay coupons.
Brunswick told employees on Wednesday that it will abandon its limited liability partnership structure in the UK and merge as a private company as part of a plan to increase investment and use its need for political lobbying and dissemination of advice.
The investment will be completed in August, at which time 140 million pounds will be paid to 200 partners in Brunswick. Parker co-founded the company in 1987 with Louise Charlton and Andrew Fenwick, and he will receive 70 million pounds, half of the total.
This reorganization is the latest in a series of mergers and external investments by public relations companies as they race to get jobs from large international companies and try to build a corporate structure that allows them to live longer than their founders.
Private equity group CVC Capital Partners More than 350 million U.S. dollars paid Acquired a majority stake in Brunswick’s competitor Teneo in 2019.
Finsbury, Glover Park Group and Hering Schuppener merged last year, when British, American and German companies began to compete with international corporate communications competitors such as Brunswick and Teneo.
The management of the newly established Finsbury Glover Hering purchased 49.99% of the shares from the British advertising group WPP, which owns the three companies.
Financial Public Relations Company Sard Verbinnen sold 40% of the shares Acquired by the private equity firm Golden Gate Capital in 2016, the business is valued at US$150 million.
A person involved in the process stated that Brunswick has operations in 27 cities around the world and advises more than one-fifth of the FTSE 100 index. The company began weighing its code-named “generator” before the pandemic. The option of capital restructuring in the project.
Relevant sources said that this transaction will value Braunschweig at 500 million pounds, and the group is expected to generate 300 million pounds in revenue this year. One of the people familiar with the matter added that BDT will spend more than the 50 million pounds implied by the valuation on its 10.7% stake because it will receive coupons on preferred shares.
BDT has previously worked with Brunswick for clients such as Mars, investing in family businesses and companies led by the founders. It usually retains investments longer than private equity firms, and is less dependent on debt financing to obtain leverage.
Brunswick’s investment will be made through the $9.1 billion fund raised by BDT last year. Those involved in the transaction said that BDT will continue to be a shareholder for at least 10 years. BDT will have a place on Brunswick’s new board of directors.
“Our few long-term investments will continue to support [Brunswick’s] Strive to maintain an independent and partner-controlled business,” said Trotter, who was a dealmaker at Goldman Sachs, advising billionaires such as Buffett and Wal-Mart’s Walton. BDT declined to comment on the scale or structure of its investment. comment.
One relevant person said that 140 million pounds will be allocated partly from existing reserves and the group will also increase its bank borrowings.
Parker listed these plans in a letter to 1,300 employees in Brunswick and was seen by the Financial Times. Parker stated that non-partners will receive a lump-sum payment from a pool of 18 million pounds. This is equivalent to about 12.5% of their annual salary.
He added that Parker, Charlton and Fenwick will sell 4% of the company’s shares to free up equity for reorganization. One of the people familiar with the matter said that the transaction will give Parker a 48.3% stake, which is about 2% lower than his current shareholding. The remaining shares are held by the partner, his co-founder and BDT.
The letter stated that over time, an additional 15% of existing equity will be issued to new and emerging partners in accordance with the “growth stock plan”.
Parker is known for his political relations with former British Prime Minister David Cameron and others. He handed over 40% of the company’s ownership to partners in a 2012 reorganization.
He insisted that after receiving a windfall of £70 million, he would stay in Brunswick and told employees that he was “as energetic as ever.”
Additional report by Arash Massoudi