Advent to lead Financial Dynamics buyout

The international private equity firm will this week announce that it is backing a £25m buyout of Cordiant’s financial public relations unit.

Struggling UK advertising agency Cordiant Communications is close to announcing an agreement with partners at Financial Dynamics, its financial PR unit over a private equity-backed buyout valuing the business at £25m.

Global private equity firm Advent International is backing a group of senior partners in a buyout of the business, which counts CDC Capital Partners, Terra Firma and Barclays Capital among its clients.

Chief executive Charles Watson will take the biggest individual holding, according to a report in The Observer newspaper. Other partners at the group, including Tim Spratt, Alex Child-Villiers and Steve Jacobs, will also take significant interests in the business. In total, the partners plan to take a ten per cent stake in the business.

Advent International was unavailable for comment.

Cordiant acquired Financial Dynamics as part of its acquisition of Lighthouse Global Network in a deal worth $592m in 2000. Lighthouse Global was backed by US private equity firms Frontenac Company and GTCR Golder Rauner.

In March, UBS Warburg, which is advising Cordiant on the sale, put a value of £28m on the business, which reported profits in 2002 of around £5m, compared with £10m three years ago. Cordiant has been forced into making a number of disposals following the loss of one of its major clients, Allied Domecq, earlier this year, and a debt pile totalling £175m.

Cordiant arranged a deal with its lenders at the beginning of May that gives it until July to dispose of three units, including advertising agency Scholz & Friends and Australian agency George Patterson Bates. Management at George Patterson have allied with Pacific Equity Partners to buy the business in a deal also worth around £25m.