Private equity group KKR is nearing a deal to buy a large stake in FGS Global that will value the WPP-backed financial communications company at about $1.4bn, according to people with knowledge of the matter.
The deal, which may be announced as soon as next week, will mark the latest big investment by buyout groups into the niche sector of communications that focus on providing strategic and crisis advice to corporations and executives.
KKR is expected to acquire more than 30 per cent of FGS from a combination of senior employees at FGS as well as advertising company WPP, the people said. WPP, which currently owns about 57.4 per cent of the company, is expected to retain a majority in the business, which will allow it to continue to consolidate the group’s accounts.
The timing of any deal may slip and a definitive transaction has not yet been signed, the people warned. FGS, KKR and WPP declined to comment.
FGS has been formed over the past few years through the merger of three communications and lobbying companies controlled by UK-listed WPP.
Those groups — London-based Finsbury, Frankfurt-based Hering Schuppener and Washington, DC-based Glover Park Group — agreed to merge in 2020. The trio bought US-based Sard Verbinnen a year later to take on their biggest competitors.
Rivals to FGS include US-listed FTI Consulting as well as privately held Teneo, which is controlled by private equity company CVC, and Brunswick Group, which has also received outside investment.
FGS Global is led by its chair Roland Rudd, a Brit who founded Finsbury in 1994, and chief executive Alexander Geiser, a German-Canadian who joined Hering Schuppener in 1998. It employs more than 1,200 people and has about 200 partners. The senior leadership and partners own about 40 per cent of its shares.
Under the terms of the roll-up of groups, FGS was aiming for an initial public offering by 2024. The investment from KKR is likely to postpone that target.
Globally, FGS topped its competitors as the lead public relations concern last year for advising on mergers and acquisitions based on deal value and volume, according to Mergermarket. Some of FGS’s biggest clients include EY, Walgreens, UnitedHealth, Bayer and SoftBank.
KKR has been a longstanding client of FGS, and the buyout group’s regional leadership, including co-head of European private equity Philipp Freise, is close with Rudd and Geiser. The US-listed KKR said this week it had closed its largest European fund and raised $8bn, the proceeds of which are expected to be used for the FGS deal.
FGS’s rivals have also sought external funding from minority stake sales. In 2021 Brunswick sold a minority stake to banker Byron Trott’s BDT Capital Partners in a deal that valued Brunswick at about £500mn.
The financial communications industry has undergone a more recent bout of consolidation. CVC-owned Teneo acquired its smaller UK rival Tulchan for more than £65mn earlier this year. Last month US public affairs company APCO Worldwide acquired London-based financial communications company Camarco in a deal worth around £20mn.
WPP has been active in dealmaking under chief executive Mark Read, notably selling a controlling stake in market research business Kantar to private equity group Bain Capital in 2019, in a deal that valued the company at about $4bn.