U.K.-based PR conglomerate Huntsworth said it will acquire public affairs firm Dutko Worldwide and its subsidiaries for $33.6M from its employees and Lake Capital Partners.
The deal includes the assumption of $9.7M in Dutko’s net debt and brings Lake Capital, a $1.3B Chicago-based equity firm, into the fold as a Huntsworth investor with a stake expected to grow to 9.4% by next year.
“We have been looking for some time for the right opportunity in Washington to extend our international public affairs network,” said Peter Chadlington, CEO of Huntsworth, which owns the PA firm Grayling in the U.S.
The D.C.-based Dutko operation, founded in 1981, has 10 offices in the U.S. and was dubbed the largest independent public policy management group by revenue in the country. Government affairs, strategic consulting, grassroots, polling and risk management are among its offerings.
Mark Irion, CEO, and his executive team will remain in place.
Huntsworth said the move marks a “significant contribution” to its developing PA operations that will grow to more than $50M in revenue worldwide on completion of the deal.
Dutko’s client roster includes blue chips like Booz Allen Hamilton, Citgo Petroleum and GlaxoSmithkline. Its healthcare experience was a particular attraction for Huntsworth amid the U.S. overhaul in that sector.
Huntsworth noted 96 percent of DW’s revenues are held on a retainer basis. Revenues for 2008 were $33.3M.
The $33.6M acquisition price consists of $22.2M in Huntsworth shares at completion of the deal, and another $11.4M in shares at the end of 2010. Earn-outs could stretch the deal to a maximum of $44.6M.