Rich JachettiRich Jachetti

While the specifics of PR agency acquisitions vary considerably from one situation to another, there’s one constant that’s true of all potential PR agency M&A deals. If the chemistry feels right after an initial phone call or meeting between the two parties, buyers invariably want to get down to business. Before taking the next step with the seller, however, most buyers will insist on having an opportunity to review highly confidential financial and other operational and management practices information about the seller prospect’s firm to determine if the chemistry, culture and fit with the seller is in the best interest of both parties, and what the terms of a deal could look like.

In our case, when buyers ask us for confidential information about a seller client, we already have most of the information at our fingertips in anticipation of the inevitable query, and after the requisite NDA is signed, we send the information along to the buyer. That’s part of the service we provide. However, there are times when a buyer wants more information than is reasonable for the seller to provide quickly. For example, if the buyer is asking for financial projections for a year not yet concluded, or for a list of companies in the seller’s new business pipeline that may look promising on paper but is actually only speculative and at best a work in progress. Understandably, sellers often aren’t comfortable providing buyers with speculative information, and for sound business reasons are reluctant to make claims about their firm’s anticipated future financial performance or to make any definitive claims about new business opportunities that may—or may not—come to pass as predicted by the seller at year’s end.

There are also instances when a buyer makes what the seller feels are unreasonable demands on him/her to provide the buyer with a mountain of confidential information about their firm in the very early stages of discussion, when the parties are still getting to know each other better. It’s in situations like these when clients depend on their M&A advisor to facilitate the delicate shuttle diplomacy needed to arrive at an acceptable happy medium that doesn’t place too great a burden on the seller to provide the buyer with information they’re still uncomfortable sharing, and yet still respect the buyer’s need for adequate background on the seller’s firm so the buyer is able to get a reasonably solid handle on the general health and well-being of the seller’s business.

Conversely, there are times when the seller isn’t as fully prepared as she/he should be to sufficiently help their M&A advisor take their agency to market, or when it takes us longer than we would prefer to extract the requisite information we need from the seller before we can begin our outreach to buyers. This is, after all, why the CEO of the seller agency engaged The Stevens Group, or another PR agency M&A firm, in the first place. Getting the information we need from sellers can, at times, require an endless thread of emails between us and our client, plus multiple conference calls, the burning up of many dozens of mobile device minutes, plus the gentle nudging, the subtle pleading and threatening—use of “threatening” here is for dramatic emphasis only—between us and our client to finally pry loose the documents every buyer eventually will insist on seeing.

Herewith, therefore, for any sellers-to-be out there, is a brief description of what in most instances every buyer will ask to see from a seller in the early stages of discussion in order to get a potential acquisition opportunity off the ground and moving in the right direction:

Must-have information list for sellers (in no particular order)

The firm’s P&Ls for at least the previous two years; and the revenue run rate for the current year (Note: buyers want to see P&Ls on an accrual, not cash, basis.).

  • Revenue and EBITDA projection for the following year.
  • The firm’s balance sheet.
  • Past two years of agency revenue for each client with client names.
  • Agency revenue broken down by service provided (i.e., revenue derived from earned media, digital media services, creative, consulting, special events, etc.).
  • A breakdown of revenues generated via retainer vs. project business.
  • Agency organization chart with a list of employees with titles and salaries for the entire FT staff and that includes same for owner(s) of the agency.
  • Average number of new business pitches firm does each year; and the firm’s new business win/loss record.
  • Account retention and attrition over past three years with names of clients won and lost in that period.
  • List of any clients that account for 20 percent or more of agency fee income.
  • Length of time of the firm’s premises lease and date when the lease expires.
  • A sample case study that demonstrates breath and depth of firm’s services, capabilities and core strengths.
  • Copy of typical client engagement letter.
  • Example of typical new business proposal.
  • Bios of CEO and key staff.

One last word of advice for PR agency CEOs who want to sell their firm. We at The Stevens Group suggest that the moment an agency CEO begins thinking about the possibility of selling his or her firm, that this is also the moment for the CEO to begin the process of gathering the information listed above. When the time is right, you want to be fully prepared to begin discussions with buyer prospects. And remember, a buyer’s first impression of a seller firm is often formed by how buttoned-up the seller firm is from day one of your first interaction with a buyer prospect. What’s more, when you’re ready to set the wheels in motion to sell your firm, you’ll already have a solid head start on what is often going to be a long, protracted process of finding the right buyer for your business.


Rich Jachetti is a Senior Partner at The Stevens Group.