City PR men make millions in takeover

Click to follow
The Independent Online

Financial Dynamics, one of the City's leading PR agencies, has been bought by an American business services company for £110m, making millionaires of its management and many of its staff.

It is the biggest deal of its kind, eclipsing the £55m acquisition of the rival Finsbury by the advertising giant WPP in 2001. Workers at FD will collect £63m from the transaction, mostly in cash, after the agency agreed to sell out to FTI Consulting, which is paying £110m for the equity, as well as taking on £27m of debt. Management and employees will also be rewarded with an $80m (£43m) bonus pool going forward.

FD was bought by management in 2003 for £26m including the debt from the troubled Cordiant media group, with backing from the private equity group Advent International, which will now exit the investment. The agreement is worth £6.6m to FD's chief executive, Charles Watson, while the head of its US operations, Declan Kelly, will get £5.5m. However, unlike Finsbury or the market leader Brunswick, share ownership at FD is spread much more evenly - across 160 employees.

According to figures in the company's latest official filings, the shares held by many employees are worth about £1m. Tim Spratt will get £1.4m from the FTI transaction, while Giles Sanderson gets £1.1m and Alexander Child-Villiners makes £1m. A number of senior employees own 27,984 shares which will net them £839,520 each.

Mr Watson said: "We've worked very hard over the last three years. The business has been transformed."

Since the buyout, turnover has jumped 120 per cent and is expected to be £70m this year. Its clients have tripled to 750, while the number of employees has increased from 180 to 450.