Adare acquires Banner Managed Communication

By Sarah Cosgrove, Monday 16 May 2016

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Global marketing services firm Adare Group has bought rival Banner Managed Communication (BMC) forming a £230m-turnover company.

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Whiteside: "This is a truly transformational acquisition."

The deal, for an undisclosed sum, was completed on Thursday and revealed within the past few hours.

Adare Group chief executive Robert Whiteside said the deal was “a truly transformational acquisition” which will boost Adare’s UK operations and give BMC better access to overseas territories, as well as be a significant step forward in Adare’s ambition to become a £400m-turnover company by 2020. More acquisitions are planned.

The deal, made with HSBC help, will bring many of marketing services’ top contracts under the same umbrella, with particular strength in global leisure, healthcare, FMCG, financial services and retail.

Pre-acquisition £170m–turnover Adare’s client list includes Coca-Cola, Heineken, Carlsberg and Pfizer, while £60m-turnover BMC currently looks after Merlin Entertainments Group, Dixons Carphone, Ladbrokes, Gala Coral and JD Wetherspoon.

Whiteside said: “I think this is a truly transformational acquisition. You won’t see many £60m-turnover businesses being bought. It puts Adare at the forefront of our markets, it differentiates us even further by our scale and by a wider range of complementary services and by an enriched customer base. It moves us further up the food chain.”

In the short term, the BMC operations will remain a separate entity, or as Whiteside put it, “a third child in the company” alongside Adare International and Adare SEC, which are individual limited companies.

Eventually the BMC operations will be split up based on their respective specialties.

“Some of the products and services sit better with International and some with SEC," Whiteside said. "We will be segregating and creating that division within Banner and then we will be integrating them into the appropriate Adare home. That will take a period of several months.

“Over the next two to three months, it’s about getting out there to the customers and getting them comfortable.”

He said the acquisition was “not about reducing headcount” and there were no immediate plans to consolidate physical operations.

“If we can rationalise and make our infrastructures more efficient we will do that. We have no definite plan to make any significant moves in terms of infrastructure, certainly for many months," he said.

“This is about two good businesses coming together with complementary products and services. BMC does things really well, they have very client-focused organisations. Great relationships with blue-chip clients.

"We weren’t growing that market at the same pace as we were growing our non-UK market. It was clear plank in our strategy with this acquisition to grow our market. The vast majority of Banner’s turnover was in the UK, which nails down a key strategy for us straight away.”

Catherine Burke will remain BMC chief executive and other senior job titles will not change, Whiteside said.

Burke said: “The combined organisation will open up a range of new benefits to our clients and other stakeholders beyond anything we could deliver as standalone businesses.

“A greatly expanded global infrastructure is one obvious example, as are our much-enhanced offerings in business-critical essential communication services, multichannel, digital visual communications, creative design, print management and countless other areas.”

Both companies were backed by UK private equity house Endless, but beyond the ‘stablemate’ status this was not a factor in the acquisition of BMC from former owner Evo Group.

Whiteside said: “People should understand that this is a targeted acquisition by Adare of Banner. It wasn’t forced by Endless.”

The deal comes despite Whiteside saying last year that there were no plans to integrate the businesses, following Adare's Endless-backed secondary MBO.

"When we did the deal with Endless it was done on its own merits, we had no interest or involvement with any other company

“But nobody’s going to be that naive that two businesses operating in the same markets and in the same stable were never going to get round the desk and have a chat. It did start off with an informal chat and sharing of ideas. We started six months ago and over the past three months things have got really quite focused and quite serious.”

Darren Forshaw of Endless said that both businesses had been operating profitably in their own right.

“Our ambitions are much greater than that, however," he said. "The new organisation will have the scale and infrastructure to be able to service the very biggest and best UK businesses and global brands. It is something of a cliché in the M&A world to talk of combined businesses being ‘more than the sum of their parts’, but if ever a deal merits that description this is it.”

Adare has a presence in 23 countries in EMEA, 10 countries in Latin America and offices in the USA and Canada. Adare International won a Queen’s Award for Enterprise last month, after it grew overseas sales by 990% and exports from 8.8% to 49.5% since 2010. 

 

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