Four Communications has held acquisition talks with five Dubai-based rivals, in a growing public relations industry now valued at $550 million.
British PR firm looks to Dubai
Four Communications, the British public relations company, is seeking to acquire a rival player in Dubai, as spending in the region's PR industry climbs to an estimated Dh2 billion (US$550 million) a year.
The firm, which has offices in the UAE and Oman, says it has been in talks with five smaller rivals over a possible purchase. "We're now on an acquisition trail," said Chris O'Donoghue, the chairman of Four Communications, who will be attending the Abu Dhabi Media Summit.
"Over the last six months we've talked to five different operators headquartered here in Dubai. We're continuing discussions with one."
Mr O'Donoghue declined to name the companies that Four had been in discussions with, or a timeline on a transaction being completed.
The firm has made two previous international acquisitions, having bought the travel communications agency bgb and the culture-based PR firm Colman Getty.
But Four Communications is now looking to make what would be its first acquisition in the Middle East, a market where there has been little mergers and acquisitions activity.
Mazen Nahawi, the president of the Dubai media firm News Group International, pointed out there had been few buyouts of PR companies in the region. "Mergers and acquisitions activity is very rare in Middle Eastern public relations industry," he said.
Mr Nahawi said the PR industry in the Middle East, Egypt and Levant was growing steadily, and was now worth about $550m a year. "It's growing, but at a relatively slow pace - at 5 to 10 per cent a year," he said.
Four Communications said it had a turnover of £20 million (Dh117.7m) last year, although the company does not split out its revenues for the Arabian Gulf.
"Here [our revenues are] up about 15 per cent in Dubai and Abu Dhabi. And we expect that to accelerate next year," said Mr O'Donoghue.
Four was set up in 2001, and now has about 150 employees globally. It plans to grow its presence in the Gulf, where it currently has offices in Abu Dhabi, Dubai and Oman.
"We're continuing to expand in the Gulf. We opened an office in Oman this year, and in the first quarter of 2013 we'll open an office in Qatar," said Mr O'Donoghue.
Ray Eglington, managing director for international at Four, said the company did not intend to finance a possible acquisition in Dubai through debt. "All these acquisitions are from our own cash flow - we're free of debt."
He added the company was actively pursuing an acquisition, but had not made a firm decision on a target company.
The firm's clients in the Middle East include Etihad Airways, Flash Entertainment and the Emirates Nuclear Energy Corporation.