LDC backs MSQ Partners with investment to accelerate growth in £37.5m deal

• Investment will support further development of multi-disciplinary model and its international roll-out
• The deal marks LDC Manchester’s second investment in two weeks

Leading mid-market private equity firm LDC has invested significantly alongside senior managers in MSQ Partners, one of the UK’s fastest growing marketing communications groups, in a deal that values the business at around £37.5m. It will enable the group to accelerate the roll-out of its successful multi-disciplinary model and support the continued growth of its individual agencies.

The deal marks an exit for NVM Private Equity, which first backed the business in July 2014.

MSQ Partners is a multi-disciplinary group of digital, creative, branding and PR agencies that specialise in marketing communications for consumer and B2B brands and the public sector. The group, which includes Holmes & Marchant (branding and design), Smarts Communicate (PR and content), Stack (customer activation and engagement), Stein IAS (B2B marketing [based in Bollington]), The Gate (creative and media) and twentysix (digital), employs more than 600 people across 15 offices in the UK, Asia and USA.

Under the leadership of co-founder and CEO Peter Reid, MSQ Partners has grown rapidly and today supports an international client base of more than 300 businesses, which include blue-chip and household names such as PSA Group, Diageo and Unilever.

With LDC’s support, Peter and his existing management team will build on the momentum they have created by further investing in talent and services to expand and develop the group’s capabilities. This will be organically and potentially through acquisition, to drive further international growth and help the group to consolidate its market-leading position in delivering effective multi-channel campaigns. A key focus will be the roll-out of its multi-disciplinary model under the MSQ brand – which now accounts for over 75 per cent of its revenue in London – across its international offices.

Peter Reid, CEO of MSQ Partners, said: “Our team has worked incredibly hard over the past four years within their agencies and collectively to strengthen the range and depth of our individual capabilities and to refine our offer to clients.  We maintain a laser-like focus on quality and creativity and it is only with our employees’ and clients’ on-going support, and that of the team at NVM, that we have been able to deliver double digit annual growth over the period.

“Our new partnership with LDC will enable us to embark on the next phase of our growth journey, giving us the resources to further invest in our individual agency’s capabilities and accelerate the roll-out of our multi-disciplinary model internationally, whilst retaining the employee-ownership ethos that has been key to our success. The team at LDC understands our vision, and with their financial firepower and strategic support they are the perfect partner to help us reach our long-term growth objectives.”

The investment was led by LDC’s John Clarke and Jonathan Bell – both of whom will join the board as Non-Executive Directors.

John Clarke, Investment Director at LDC in Manchester, added: “Peter and the team at MSQ have built a truly formidable business that is able to provide full-service, marketing communications services on an international scale. The business retains its independence, agility and a culture that continues to attract some of the best talent in the market. It is this combination that continues to drive MSQ’s growth and we’re looking forward to partnering with the team as we support them with our expertise and significant investment on the next phase of their journey.”

David Rolfe, Partner at NVM, said: “It has been a pleasure working with the MSQ management team and the individual agencies over the last five years. The group has developed significantly during this time and is perfectly placed to embark on the next phase of their growth journey. I wish Pete and the team all the best.”

The deal marks the second investment from LDC’s Manchester team in under two weeks and follows its £20million investment in Shield Group International.

LDC has a track record of supporting businesses to grow through acquisitions. In 2018, the firm helped its portfolio management teams acquire 25 complementary businesses both in the UK and overseas which had a total value of £125million. In Manchester LDC-backed Fishawack, a specialist communications provider to pharmaceutical companies, acquired US-based Carling Group to expand overseas and provide Fishawack with greater access to the North American market.

LDC was advised by Manchester-based advisers including Deloitte, Gateley and KPMG.

MSQ was advised by GP Bullhound, Browne Jacobson and Grant Thornton.

Debt facilities were provided by HSBC.