The new group, MSQ Partners, bought the company from the administrators and claims it will have a much stronger financial structure, with debt reduced to £8m.
A statement said: “Media Square had an unsustainable level of debt which dated back to a series of prior acquisitions, most notably the £63m MSG acquisition in September 2005. The administration only covered the holding company and, the individual agencies, which operate within their own separate legal entities, continued to trade as normal.”
Peter Reid, the chief executive of the new company, added: “This is an extremely positive development for our staff, clients and suppliers. The deal provides a platform for the group to build on the significant progress made by its agencies at an operating level over the past two years, in particular. The debt burden of Media Square was holding back these businesses and as part of the transaction a much more appropriate and sustainable financial structure has been implemented within the group.
“An employee-owned structure where the employees take the majority control and can share in the future success of the business is one that we believe will see our agencies realise their full potential.”
A statement released to staff this afternoon said:
This afternoon, MSQ Partners Ltd, a new corporate entity founded by myself and chairman Roger Parry (pictured) agreed to purchase all of the existing Media Square agencies in a management buyout.
The result of the transaction is that the Group will have a significantly reduced level of debt and will be much better positioned to flourish over the next three to five years.
In addition, following the MBO, the Group will now be employee-owned and the intention is that ultimately a significant number of employees will have the opportunity to become shareholders in the new Group.
This transaction and these changes do not have any direct implications for you and your agency. There will be no changes to any terms and conditions or management structures and the vast majority of your clients and suppliers only have direct relationships with the agencies (and not with the plc).
Therefore, from your point of view, things will very much remain ‘business as usual’ in the immediate term. However, as we move forward, I believe that we will all start to see substantial benefits from having a greater level of financial stability, as well as being a private company that is owned by the senior employees of the Group.
I wanted to provide you with this news as soon as possible and will follow-up with a more detailed ‘Q and A’ which will hopefully answer many of the questions that you may have over the next 24 hours. Equally, should you (or a client/supplier) have any further questions, please do not hesitate to contact either your agency MD or myself.
Following this transaction today, I am extremely excited about the future of the Group and look forward to working with each individual agency to help you reach your full potential and for the Group to flourish into a truly distinctive marketing communications group.
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