So Huntsworth is selling its non-PR businesses to Media Square in a move that makes both firms more interesting. Huntsworth inherited a collection of non-PR businesses when it merged with Incepta, not to mention a pile of debt. In selling to Media Square it becomes a more streamlined business with little or no debt, which has to music to the ears of the investors. For Media Square they get a business that reaches around the world and has good scale. What's striking is that this move goes counter to the way the larger comms Groups have tackled things. If WPP had been Huntsworth they would likely have merged with Media Square just to build a larger group that offered a full spectrum of marcomms services. These businesses have chosen a different path which I have to applaud. I'm delighted to see the management of these businesses stick with what they believe they know and do best.
Of course this does all mean that Huntsworth now really has to show that its non-PR businesses were holding it back and equally Media Square has to show that its competence in the marketing services area can be applied to the businesses that have of late struggled under the Incepta/Huntsworth umbrella. Time will tell I guess.
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Whilst Huntsworth seem to have made a good decision to sell off. What do you think the impact will be on the companies being sold to Media Square? I checked out the Media Square website and found it bare and scrappy. Plus most of it's recent profits are derived from the Christmas season..
The City reaction has been to depress the Huntsworth share price. Wonder why? Suspect that this could be a rather good deal for Media Square - and for the acquired businesses. Media Square seem to be buying £70m+ gross profits and some market leading companies like Dynamo, Incepta Marketing Intelligence, Finex, Tango Zebra, etc, for less than their headline value...
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