KKR in talks to buy stake in public relations company FGS Global

theguardian.com:

The US private equity investor KKR is in talks to buy a stake in the public relations company FGS Global that would give it an enterprise value of about $1.4bn.

KKR was in talks to buy more than 30% of FGS, the Financial Times reported on Thursday, although a person with knowledge of the talks said the final proportion may be lower.

Investment firms have made a series of deals in recent years for stakes in public relations companies, who advise big corporate clients on how to communicate with journalists on issues ranging from regular financial results to crisis management.

FGS was formed in 2020 through the merger of London-based company Finsbury, Germany’s Hering Schuppener, and the Glover Park Group. In October 2021 the group bought Sard Verbinnen & Co (SVC) in a deal that valued FGS’s equity at $917m.

The merger was pushed through by WPP, the FTSE 100 advertising company which was a shareholder in all three. WPP is expected to remain the majority shareholder even if a deal with KKR is completed.

The sale of a large stake to KKR could allow another US private equity firm, San Francisco-based Golden Gate Capital, to exit its investment.

Golden Gate was an investor in SVC before the takeover, and still lists the firm as its own media contact. Under the terms of that deal, Golden Gate and SVC managers had the option to sell their shares in FGS to WPP if there had been no stock market float or a sale of the new company before 1 January 2024.

The last takeover left WPP with 57%, and managers in the pre-takeover company holding 26%. About 400 FGS employees are also shareholders, and that number is not expected to change if the KKR deal is completed.

FGS’s clients range from KKR itself to some of the biggest companies around the