RSS feedsWillott Kingston Smith client Mission Marketing Group is an AIM-listed advertising and marketing agency on a drive to create a new UK media group based on two key ideas. The first is to look for businesses outside the capital.
Agencies outside London have largely been ignored in the waves of consolidation that have occurred in media, PR and advertising, says CEO Iain Ferguson. ‘If you’re growing a global business you’ll look for agencies in capital cities, but there’s an interesting economic drift in Europe towards the regions. The cost of doing business in capital cities is only going to increase and governments are keen to see wider regeneration. So there are some really good businesses out there that have been overlooked.’
The kind of businesses that Mission is seeking on its hunt for acquisitions are agencies that have a broad offering: in other words, businesses that are not solely based on TV or mass-market media. So Bristol-based PR firm Bray Leino also has a big training and education side. Importantly, Ferguson is looking for profitable businesses with lots of potential. ‘We’re not interested in turnarounds,’ he says.
The second part of Mission’s plan is to offer these companies an opportunity to grow as part of a larger group. ‘While you are an owner-managed business, there are always going to be barriers to growth. Our offer is that you’ll be joining a group of like-minded people. There is no hierarchy in terms of one agency being more important than another – everyone is a stakeholder. We’re offering deals in cash and shares and we don’t have a complex structure.’
Mission’s management team turned to Willott Kingston Smith because of its strong reputation in the sector. Deputy chairman and founder Martin Banbury, chief operating officer Jerram Shurvill, chief financial officer Tim Alderson, as well as Ferguson, had all worked with the firm in former roles. From the off, Ferguson says, the team was looking for the right kind of audit partner and full-service adviser. They didn’t want to look to a Big Four firm, yet needed advisers who were well versed in the media sector. Mandy Merron, says Ferguson, ‘understands us and our business and understands our sector well. We get a lot of face-to-face time with them, which is helpful because we’re looking for guidance along the way. We don’t just want to talk to someone at some artificial date in the business calendar.’
The event in Mission’s short history that best illustrates this is the company’s AIM listing earlier this year. Ferguson and CFO Tim Alderson joined the company specifically for the IPO. It was, explains Ferguson, not a simple matter, but a frenetic and challenging time. ‘We were working hard, doing an IPO and investing at the same time in the acquisition of [PR agency] Bray Leino. There’s a great deal of due diligence and preparatory work that goes into that.’
Mission has plenty of ambition. It expects to acquire a fourth company around the turn of the year and its strategy is to continue to look for interesting, profitable, low-cost agencies. Since listing on AIM, the company posted proforma interim results, showing turnover growth of 23% compared with the same period last year. The company is on track to make its next acquisition without going back to the market for more funds. Future acquisitions – the company aspires to making two each year – would require more funding.
The company’s finance team talk to Willott Kingston Smith several times a week. ‘We ask questions as we go along. It makes for a well-informed audit, with no surprises.’
The continual contact, however, is not just confined to audit advice. Mission values the informal guidance about the marketing sector that it gets along the way.
Mission possible
Willott Kingston Smith proved its value at the time of Mission’s AIM listing. ‘At a time like that, you don’t have time to answer stupid questions. You need people who understand the business and know what needs to be done. We were creating a holding company and using the new entity for our acquisition. There are a lot of transactional issues there. They were pragmatic, quick and good.’
Mission CEO Iain Ferguson is happy with Willott Kingston Smith. ‘If I had to scorecard it, I would say: Are they good advisers and good counsellors? Yes. Do they give pragmatic and well-grounded advice? Yes. Do they give plenty of face-to-face time with senior people? Yes.’
