Halfway through 1999, mergers and acquisitions in PR land have easily lapped last year's record, according to a study released by the Council of Public Relations Firms (CPRF).
Notably, five powerhouse parent companies - Omnicom, Y&R, WPP, Interpublic and True North - are now responsible for half of all worldwide PR revenues.
The report, written for the financial community and PR buyers and sellers, offers findings based on 111 deals closed since 1997, along with a detailed survey of 62 principals who were involved in transactions during the past year. The results have tweaked the interest of the investment banking industry for good reason.
"The desire to maximize value for the shareholders of major communications companies has played a major role in the dramatic pace of acquisitions of [PR] firms during the past three years," says Abbott Jones, managing partner of AdMedia Partners. "Revenue growth and profit margins of [PR] firms have been increasing more rapidly than advertising agencies."
In light of the current fragmentation of the media market, the report also chronicles the evolution of ad agencies into "integrated communications companies" and their subsequent hunt for PR acquisitions as a means of retaining consumer relationships that might otherwise be lost. Also highlighted are mergers among independent PR firms seeking to leverage new opportunities.
The report is free to CPRF members and $100 for nonmembers. Call 877-PRFIRMS for more information.