10 public relations companies that are prime M&A targets in 2021, according to experts

Greg Galant, Muck Rack

Summary List Placement

Public relations industry experts predict M&A will ramp up in 2021 as the economy improves.

PR firms are eyeing acquisitions in healthcare communications, which has been a consistent source of growth, as evidenced by financial communications firm ICR’s acquisition of Westwick Partners in 2019.

Deals like BCW’s 2018 acquisition of HZDG, which specializes in branding, advertising and digital, and W2O’s 2021 acquisition of Swoop, a data analytics company, show agencies also have an appetite for digital expertise and data analytics to inform and measure their campaigns.

After the pandemic had a cooling effect on M&A in PR software in 2020, deals are likely to pick up in 2021, said Chris Porter, an associate at Burton-Taylor Consulting, which analyzes the media intelligence industry.

Insider asked seven PR industry executives and consultants which firms and software companies could be hot acquisition targets in 2021. To be clear, none of these people said these companies were actually in talks.

Most of these companies either declined to comment or said they weren’t interested in a deal.

Below are 10 companies they named, listed in alphabetical order. Where available, their financial information is provided.

BlueFocus

Recent troubles at China-based marketing giant BlueFocus has jumpstarted chatter across the PR industry, with one insider saying its stagnant stock price makes it particularly ripe for acquisition.

Market headwinds forced BlueFocus to shelf its plans to list subsidiary Blue Impact on the New York Stock Exchange via a merger with a SPAC called Legacy.

BlueFocus continues to own Blue Impact, a 2,400-person group with international assets like PR firm Citizen Relations and creative agency We Are Social, according to ProvokeMedia.

BlueFocus recorded annual revenue of $329 million in 2019. Its clients include Samsung, P&G, and Tencent.

Brunswick Group

1,200-person Brunswick Group is one of the biggest financial communications agencies in the world, with $324 million annual revenue, according to PRovokeMedia.

But Brunswick has had a bruising few years, starting in 2017 with the exit of Steve Lipin, who built the firm’s mergers and acquisitions practice. In 2018, women accused founder and chairman Alan Parker of allowing sexual harassment and bullying at nonprofit group Save the Children, where he served as chairman before resigning that year.

Brunswick declined to comment for this article.

However, the agency is clawing its way back, hiring prominent PR pros like Jonathan Doorley to revamp the mergers and acquisitions practice and CNBC’s Nik Deogun as CEO of the Americas and US senior partner.

Industry experts say Brunswick Group could be an acquisition target because of its strong financial communications business and because Parker hasn’t announced his personal plans.

Day One Agency

Six-year-old Day One bills itself as a “creative communications” firm, running campaigns that integrate social media, PR, and digital elements.

Along with an attractive client list, the company’s creative strengths would be valuable to PR agencies looking to grow outside traditional communications.

It helped Motorola launch its Razr flip phone, using a short film starring “Ozark” actress Julia Garner, a virtual premier, and promoted social media posts, according to PRWeek.

Day One’s other biggest clients include American Express, Chipotle, and Nike. It has offices in New York, Los Angeles, and Chicago and reported $24 million in revenue in 2020, a 13% year-over-year increase.

“We believe that by remaining independent, especially in today’s quickly changing world, we’re able to be nimble and move at the speed of culture — all qualities our growing team and established clients value,” CEO and co-founder Josh Rosenberg told Insider.

Finsbury Glover Hering

WPP-owned Finsbury Glover Hering was formed in 2020 through a merger of the three eponymous agencies, creating a $200 million agency that employs almost 700 people.

Each of the three focuses on a different aspect of PR: Finsbury handles crisis and financial communications in the US; Glover Park Group is a public affairs firm founded by former Clinton and Gore aides; and Hering Schuppener is a financial communications firm that handles business in EMEA.

Insiders see Finsbury Glover Hering as an acquisition target because of this combination of services and its global scale.

Speculation about the agency’s future was fueled by a Financial Times report that Roland Rudd approached WPP about buying back his business from the holding company in 2019.

Memo

PR startup Memo has won clients like Google and Walmart by pitching them precise measurement using data it obtains from publishers like Condé Nast, Forbes, and The Washington Post.

Memo has since started building on that service by packaging up the data with insights.

As marketers look to better measure the efficacy of their PR, Memo’s data assets could make it attractive to investors and competitors. CEO Eddie Kim told Insider he’s looking to raise funding in 2021.

The company has a headcount of 15 and growing, having recently hired Karlie Santucci as chief customer officer and Ashley Stires-Nouls as VP of people.

Muck Rack

Muck Rack is seen as a perennial acquisition target because of its high growth rate and software.

Founded in 2011 as a database of journalists, the company has expanded to other services like media monitoring and distribution.

The 100-person company is profitable and has grown 60% year-over-year since its founding, with clients like Taco Bell, Pfizer, and JP Morgan Chase.

Newswire

Founded in 2004, press release distribution company Newswire is attracting the attention of prospective buyers after increasing revenue 59% in 2020 on subscriptions and user growth.

A chunk of that growth can be traced back to the August 2019 launch of an earned media offering that helps clients publish their press releases, measures performance, and generates sales leads and web traffic.

Larger competitors may want to acquire the company to bolster their tech offering, one insider said.

Ruder Finn

PR firm Ruder Finn spun off Finn Partners in 2011, keeping the social media and digital business that’s considered its crown jewel.

That unit makes the $78-million Ruder Finn an attractive acquisition target, a former executive said. The firm is also the largest independent agency in China, surpassing even larger global players like Edelman, and it has a massive business in biotech and pharmaceuticals.

In recent years, Ruder Finn has acquired a number of businesses like marketing agency RLA Collective, internal communications firm SPI Group, video production house Osmosis Films, and PR firm Jacobstahl.

Sard Verbinnen & Co.

Sard Verbinnen & Co. sold a 40% stake to private equity firm Golden Gate Capital for $60 million in 2016.

The financial and crisis communications firm is approaching the five-year mark of that deal — the point when PE firms typically look for an exit — stirring chatter in the PR industry about possible buyers.

Since 2016, Sard has grown its headcount and revenues by more than 50%, opened new offices in Hong Kong and Washington, DC, made acquisitions, and expanded to public affairs and corporate governance.

A Sard insider said the firm sold to Golden Gate Capital because the private equity firm has a perpetual fund structure and Sard didn’t want to be under pressure to exit in five years.

Walker Sands

The 137-person B2B marketing firm recorded more than $20 million in revenue in 2020. Its services include PR, creative, and demand generation and it has offices in Chicago, Seattle, and San Francisco.

One agency CEO said Walker Sands would provide a foothold for any firm that wanted to get into B2B PR, calling it a “big area of opportunity.”

Walker Sands president Mike Santoro said the firm has no plans to be acquired. The firm got investment from private equity firm Stone-Goff in 2019 to open new offices and pursue acquisitions.

“We have an ambitious vision and anticipate making targeted acquisitions in the coming years,” he said.

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Healthcare marketing giant W2O just snapped up two more companies as it seeks to take on consultancies like Accenture and Cognizant

Summary List PlacementW2O Group, one of the largest healthcare marketing and communications firms in the world, just acquired two more companies as it races to scale and take on large consultancies like Accenture and Cognizant and analytics firms like Komodo.
Swoop is a data and analytics company that helps healthcare clients identify potential patients for certain treatments, while data insights company IPM.ai provides data to speed up the research, development, and commercialization of therapies for patients affected by rare diseases.
The two companies, which collectively have a data pool of more than 300 million anonymous patients, will help expand W2O’s offerings to services like designing and executing clinical trials and launching products for clients. Previously, W2O got data from publicly available sources and social media through its own platform and Symplur, which it bought in 2020.
“Data is collected everywhere now,” W2O CEO Jim Weiss said. “It’s changed how we can leverage data and analytics and how we can find more efficient ways to target audiences, and market and communicate with them. The whole industry has been moving in this direction, and we modeled our business around those inevitabilities.”
Read more: 8 big investors like Golden Gate Capital and Stagwell Group that are betting billions on public relations firms
Most of W2O’s clients have been large biopharma companies like Astellas and Takeda, but it also wants to branch out to healthcare organizations like hospitals and medical technology companies, Weiss said.
W2O and Huntsworth Health have led consolidation in healthcare communications and marketing in recent years.
Healthcare marketing spending was a rare bright spot in the pandemic, and W2O flourished, with revenue up 50% to $350 million in 2020, in part on increased demand to promote telehealth clients to patients in lockdown, Weiss said. 
Growth also came from nine acquisitions W2O made since selling an undisclosed stake to private equity firm New Mountain Capital in 2019. W2O has acquired 11 companies since 2016.
Weiss projects the company will top $450 million in revenue in 2021; it’s hired McKinsey to help scale the company. Long term, W2O wants to expand to areas like healthcare e-commerce and launching therapeutic products through licensing agreements with pharmaceutical companies.Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that’s worth .001% of his total wealth

Everything marketers need to know about hiring an agency to grow their business on Amazon

Summary List PlacementA cottage industry of agencies want to be advertisers’ go-to Amazon expert.
Amazon is the third-biggest digital advertising company behind Google and Facebook. Amazon made $13.5 billion from advertising in the first three quarters of 2020, up from roughly $9.3 billion in the year-ago period.
As Amazon’s ad business has grown, dozens of agencies — many founded by former Amazon employees — have popped up to help advertisers buy ads and sell products on the website. Amazon itself recommends many of these agencies through an online directory.
E-commerce analytics firm Profitero estimated that there are now closer to 130 or 150 North American Amazon agencies now, up from 100 in 2019.
“The Amazon ad agency landscape is large, fragmented and quickly growing — there are very few barriers to entry preventing anyone from starting their own shop,” said Bryan Wiener, CEO of Profitero.
Read more: Inside Amazon’s advertising business, which is $13 billion and growing
TV and digital advertising is typically handled by an advertiser’s media team, but Amazon ad spend is handled by specialists who also manage retail operations. That gives Amazon-focused agencies a leg up over the large holding companies that have e-commerce advertising arms but do not handle retail areas like forecasting, replenishment and setting up product pages, said Travis Johnson, global CEO of Amazon agency Podean.
“It’s too much nitty-gritty for the big agencies to employ expertise in that space, and agencies tend to focus on the advertising side of things,” he said. “The person who owns the budget needs a lot more than advertising to be successful on Amazon.”
Amazon’s structure can also be difficult for marketers to understand without an agency to handle communication with the company. Johnson said that it’s typical for marketers to deal with separate teams within Amazon for onboarding advertisers, search advertising, display advertising, and refunds and chargebacks.
The pandemic has also sped up the pace that brands are hiring Amazon agencies as e-commerce sales and inventory management challenges have grown.
Lauren Picasso, CEO and founder of sports drink brand Cure Hydration, recently hired its first agency. Two-year-old Cure Hydration sells on Amazon, Shopify, Thrive Market, and in retail stores like Walmart and Whole Foods. 40% of Cure Hydration’s sales come from e-commerce.
Picasso said that the coronavirus has cut the amount of inventory that Cure Hydration can send to Amazon from three months’ worth to one. Amazon has also taken longer to check-in products, leading to Cure Hydration’s products being out of stock during the pandemic.
Read more: Ulta Beauty is pushing into advertising as it chases a piece of the $17 billion e-commerce ad business
“We needed to bring on an agency with Amazon expertise — we wanted someone to help us figure out the right cadence of shipping inventory, we wanted some help building out a dedicated brand store, and wanted someone with expertise in Amazon marketing,” she said.
Picasso hired Seattle-based commerce agency The Stable to handle advertising, design work for a branded store, and operational work.
“It’s all primarily ex-Amazon employees, which I think is what differentiated them to me,” she said. “Their team is deeply familiar with Amazon, having worked there before.”
Insider spoke to a mix of agencies, brands, and tech firms to break down what brands need to know when hiring an Amazon agency.

What do Amazon agencies do?
Amazon agencies have carved out a niche by focusing on e-commerce. Most of the agencies do not help manage other digital channels, but some are expanding to marketplaces like Walmart and Instacart that are pushing into advertising.
These agencies fall into two types: Those that help brands sell their products and those that help brands run ads on the platform. Agencies also often work with adtech vendors like Teikametrics, Pacvue, and Kenshoo that sell ad optimization technology.
Agencies like Blue Wheel Media solely offers advertising services to differentiate itself and avoid services that might overlap with in-house teams.
“Our motto has always been that the biggest brands on Amazon are the best advertisers,” CEO Trevor George said.
Other firms like Amify help brands sell items on Amazon with services like strategy, operations, and advertising.
“We believe that Amazon should be an extension of your website and a direct-to-consumer channel. By cutting out the middleman, you make more money,” said Ethan McAfee, founder and CEO of Amify.
What don’t Amazon agencies do?
Many brands still handle part of their e-commerce in-house.
Brands typically handle creative for their products themselves so they can use the same product photos and videos of products outside of Amazon. Agencies then take the assets and create Amazon-specific content on product pages and brand stores.
Stock allocation and merchandising are two other areas that brands often handle in-house. Both functions help brands keep control over distribution, especially if brands sell to retailers outside of Amazon.

When should you hire an Amazon agency?
Deciding when to hire an Amazon agency depends on the scope of the work.
Advertising-only firms like Blue Wheel Media work with brands that make more than $1 million in yearly revenue, meaning that its clients need to already have an e-commerce operation and are looking to ramp up spending.
Other firms like Amify help companies build an e-commerce strategy from scratch and turn Amazon into a direct-to-consumer channel.
John Ghiorso, founder and CEO of Orca Pacific, said that the recent boom in agencies comes from Amazon getting bigger and harder to navigate. To meet the demand, agencies are also rushing to develop technology to handle tasks like media buying and optimization.
“It’s gotten far more complicated and the competition has gotten more fierce on the platform,” he said. “Five years ago, you could do it on your own as a mid market or small brand. The game has gotten much more sophisticated.”
What should you ask when hiring an Amazon agency?
Brands should ask firms specific questions about how their account will be handled, said the agencies.
“You have to be able to come up with a specific custom approach to the advertising strategy,” said Kashif Zafar, EVP of sales and marketing at Orca Pacific.
Some examples of questions are:

Which areas does your agency have demonstrable experience in?
What tools do you use to get an edge on Amazon?
How will you gauge success on Amazon?
Which products should I advertise?
What is the org structure of your agency and what are your employees’ work backgrounds?
How much control do advertisers have when an agency runs my account?
What are your other customers doing?
What is a good advertising cost of sale? (ACoS measures the ratio of ad spend to revenue.)
Can you give me references to talk with your other clients about your expertise?

How much does an agency cost?
Most agencies charge based on a percentage of a brand’s sales or advertising revenue. Blue Wheel Media and Orca Pacific said their fees start at a few thousand dollars per month and increase based on the size of the client.
Blue Wheel Media also offers brands month-to-month contracts for advertisers looking for quick help with advertising.
Ethan McAfee, founder and CEO of Amify, said the firm charges a monthly fee of $10,000 to $50,000 to its clients, most of whom have between $5 million to $50 million in annual sales on Amazon. 
How much money should you spend on advertising?
Some experts said that the rule of thumb is that brands should spend 5% to 20% of their sales on advertising — similar to the percentage that retailers have long recommended brands pay retailers in exchange for distributing products in stores.
Orca Pacific’s Ghiorso said that that rule is outdated and that with Amazon ads, brands should spend based on performance.
“If you’re doing $100,000 a year on Amazon and you spend $10,000, that’s not going to give you much [but] if you’re doing $100 million in sales and spending 10%, that’s a decent number,” he said. “There’s still a legacy mindset that’s the inverse of how brands should be looking at it.”
Amity’s McAfee recommends that brands spend 20% on advertising when launching a new product to rank higher in search results and get discovered, then drop to 10% once it’s profitable.
Cure Hydration spends about 20% of its revenue on ads, but Picasso said that it’s more important to generate reviews for products when launching a brand. She recommends that brands have at least 10 four-star reviews before starting advertising.
What kinds of ads should you buy?
Amazon has dozens of ad formats that often are mistaken for each other. Experts recommend brands start with sponsored product ads, which appear as promoted items in search results.
“If you’re in a category like makeup and people are searching for generic terms like ‘eyeshadow,’ paid search is your best initial advertising return because people already have intent, and you need to convince people that your product is the right one,” said Podean’s Johnson.
Orca Pacific’s Ghiorso recommends that brands next add display ads to help build brand awareness and loyalty. Display ads run through Amazon’s programmatic ad platform.
“Display is upper funnel, and there’s also a technical skill to running the campaigns where the upfront cost to running campaigns will not be able to justify doing it internally,” he said.Join the conversation about this story » NOW WATCH: Why electric planes haven’t taken off yet

Payment startup Curve has raised a fresh $95 million but faces questions over its late financial filings

Summary List PlacementPayment card startup Curve has landed a fresh $95 million in Series C funding, but has raised eyebrows for filings its 2019 financial accounts late.
Founded in April 2018, Curve has now raised some $175 million in funding. The startup offers a payment card that digitally aggregates all of a user’s debit and credit cards.
Unlike in the US, private firms of a certain size in the UK are obliged to file detailed annual accounts. It can be a valuable snapshot into the state of a business.
Curve was due to file its full-year results for 2019 on 31 December but missed the deadline. Sifted reported that the firm had already been granted extensions to its filing deadline in March and October. Curve is also under caution by the UK’s financial regulator over its lack of records.  The fine for not filing accounts is, however, negligible. 
Asked why the filings were late, a Curve representative said: “We have now filed our 2019 accounts at Companies House. These were delayed by a few days, as a result of our focus being fully centered on a successful Series C fundraise.”
Insider has previously raised questions about Curve’s transparency.
During a crowdfunding drive in September 2019, Curve did not reveal a monthly active user figure, but claimed in an investor pitch deck it would reach 4 million customers by the end of 2020. The firm subsequently raised £6 million ($7.7 million) from the drive. Figures obtained by Insider for May 2019 indicated monthly active users were a tiny fraction of its then-500,000 customer number, implying the firm was struggling at that point to keep users loyal.
A Curve representative on Monday declined to disclose active user base, but said the company had seen significant growth.
“The number of active users is commercially sensitive information, but what we can say is that over the past 12 months we have seen significant growth both in customer numbers, which now total 2 million up from around a million at the start of 2020, and the value of transactions processed by our platform, which now exceeds £2 billion up from around £1 billion over the same period,” they said. “Both of these metrics demonstrate our impressive growth trajectory of the business and the appeal of our products and services. Investors too are comfortable with our progress as proved by our successful Series C round.”
And one early investor in Curve told Insider that they were fully on-board with Curve and had no issue with either its lack of filing or MUA figures. 
With its new funds, Curve is planning to grow its headcount from around 300 currently to around 600 in the next 12 months by hiring across Europe and the US. The company also plans to develop a new product called Curve Credit. 
In addition to its 2019 accounts being overdue on Companies House, , the company has been accused of a lack of transparency. 
The funding round was led by IDC Ventures, Fuel Venture Capital and Vulcan Capital, with participation from OneMain Financial and Novum Capital. Curve previously raised a $55 million Series B in September 2019. 
“The proceeds of the fundraise will be used to support international expansion and research and development,” Shachar Bialick, founder and CEO at Curve, told Insider.”Our expansion plans will focus primarily on launching in the US and deepening our foothold in the European market, which has shown a very strong pool during 2020. Both markets offer incredibly exciting growth prospects in 2021 and beyond.”
The company declined to comment on its new valuation. SEE ALSO: The London fintech aiming to become the ‘Spotify for money’ raised $55 million using this pitch deck
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