MSQ Partners, the company behind agency brands Stack, the Gate, and TwentySix, has set its sights on a major expansion drive after securing a new private equity deal which values the business at about £37.5m.
PE firm LDC has invested what it describes as “a significant” amount in the group, with senior managers also taking a stake. This investment marks an exit for NVM Private Equity, which first backed the business in July 2014.
MSQ says the deal will enable the group to accelerate the roll-out of its multi-disciplinary model beyond London and support the continued growth of its individual agencies, which also include Holmes & Marchant, Smarts Communicate, and Stein IAS.
The group employs more than 600 people across 15 offices in the UK, Asia and USA. It has an international client base of more than 300 businesses, including PSA Group, Diageo and Unilever.
The expansion drive will be “organic” and potentially through acquisition, to drive further international growth and help the group to consolidate its position in delivering effective multi-channel campaigns.
A key focus will be the roll-out of its multi-disciplinary model under the MSQ brand – which now accounts for over 75% of its revenue in London – across its international offices.
MSQ Partners chief executive Peter Reid said: “Our team has worked incredibly hard over the past four years within their agencies and collectively to strengthen the range and depth of our individual capabilities and to refine our offer to clients. We maintain a laser-like focus on quality and creativity and it is only with our employees’ and clients’ on-going support, and that of the team at NVM, that we have been able to deliver double digit annual growth over the period.
“Our new partnership with LDC will enable us to embark on the next phase of our growth journey, giving us the resources to further invest in our individual agency’s capabilities and accelerate the roll-out of our multi-disciplinary model internationally, whilst retaining the employee-ownership ethos that has been key to our success. The team at LDC understands our vision, and with their financial firepower and strategic support they are the perfect partner to help us reach our long-term growth objectives.”
The investment was led by LDC’s John Clarke and Jonathan Bell – both of whom will join the board as non-executive directors.
MSQ was formed in December 2011 following an £11m buyout of former Media Square companies from the administrators. Media Square had been refused financial assistance by the bank on debts of around £26m.
At the time, the deal was slated by former Willott Kingston Smith boss Bob Willott, who called for a change in the law to prevent former directors from buying back a defunct company.
Reid is the last man standing of the three directors who bought the business; Dean Wright resigned in May 2013; Roger Parry quit last week.
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