Oxfordshire, England – Razor, a full service communications consultancy, announced today that it had completed its sale to business communications consultancy College Hill. The deal will open new doors for Razor to offer its range of unique products and services to a wider range of clients who need its specialist crisis, risk and issues management expertise.
Pembridge managed the sale, working with Razor’s Managing Director for a year to highlight the package of premium value that Razor had built in a way that would be recognised by potential sale partners, despite a depressed market.
Chris Woodcock, Razor’s Managing Director, explains: “What we have created is a general corporate consultancy with both vertical and lateral Unique Selling Points. The vertical USP is our expertise in Food and Drink. The lateral practice is risk management.”
The snug fit between allows Razor to offer its clients real value because, in an age of blogs, podcasts and many more voices in the public domain, it’s hard for brands to control what’s said about them. An adverse rumour spreading among a food or drink brand’s customers could be disastrous and – unlike the good old days – there’s no straightforward way to injunct or force a retraction of something that’s just not true.
Pembridge Partner Rose Lewis led the work with Razor. “Traditionally, the risk management business and communications have been separate worlds. Razor were extremely unusual in linking the two holistically in one company - taking risk to comms and comms to risk,” she says. “It couldn’t work without a truly committed team and so the primary consideration in looking for a partner to continue growth was finding the right home for Razor’s people, products and skills.”
Lewis cites Razor’s clarity about what it wanted to achieve as a key to making the sale process a success. It meant that a carefully orchestrated corporate story in trade journals in the run-up to the sale could build interest and make the positioning concrete. She also worked with the Razor team to marshal the numbers that proved the team’s niche offered long-term contracts with margins that could sustain Razor’s growth long term.
Woodcock has compelling arguments supporting Razor’s proposition to clients which also allowed a compelling proposition to be put to College Hill: “Changing patterns of conversation amongst consumers are just one reason why crisis management is being seen as a growth area. Another is increasing sensitivity around corporate governance. The threat to corporate security comes through new litigation, changing regulation and increased public scrutiny. Crisis, risk and issue management is now definitely a critical element in any corporate governance policy and therefore something that’s a strategic issue at board level.”
By way of example, Woodcock points to the legislative changes that will soon make individual senior managers liable, and expose companies to unlimited fines, in cases where Corporate Manslaughter can be proved. Planning for new developments like this has allowed Razor’s team to create an expert practice which now has real credibility, but pioneering the path wasn’t easy.
“We spent the first part of our eight years in business having to discover, approach and convince every prospect of our ability and to build a reputation solo, in a very large market, with an unusual proposition,” Woodcock recalls. “One of the main reasons for this deal with College Hill was to provide a larger business base for Razor. To be able to work alongside 180 other people already embedded in mature relationships with brands will be a dream come true. We now have ready access to a base of prospective clients with genuine need – effectively, they are sitting next to us in the shape of our new colleagues. The College Hill account teams recognise that the business will go two ways and that we won’t cannibalise or detract from what they do. It really will be a win-win.”
There’s everything to play for in the future, but the process of getting here started five years ago, when Razor first contacted Pembridge. The two stayed in touch and formalised their relationship following a competitive pitch process at the start of 2007, where Pembridge proved its unique offering.
“Out of all the people I saw, Pembridge had the right credentials in the market,” says Woodcock. “They were based in London, where I had a hunch our eventual buyer would be based, and their scale of operation meant I could be sure they would stay focussed on our interests through a critical process in Razor’s development”
For Rose Lewis, managing the sale process meant paying attention to detail: “On the housekeeping front, we made sure we’d done everything to make the sale friction free - to take away the reasons to say ‘no’. But ultimately, it was Razor’s unusual proposition that allowed us to put together a strong first list of possible suitors”, she says. “We deliberately rode two horses: the option of a sale to a business continuity firm, or to a communications firm. But it was clear from the first meeting with College Hill that its management team understood what makes Razor successful and that ultimately made it the ideal purchasing partner.”
College Hill Chairman Alex Sandberg and Group Chief Executive, Richard Nichols, added: “Chris is exceptionally experienced in the PR industry and the Razor team has built an enviable reputation. Their specialism in the increasingly important area of risk management communications is a valuable enhancement to the services we provide our clients.”
The evidence backing that statement is the premium College Hill chose to place in valuing the business. Lewis sees inspiration in that for other PR firms thinking of building towards an exit.
“I think this deal should encourage everyone serious about realising value from growth in this sector that it is possible for a top-calibre smaller consultancy outside London to command respect with a top 20 agency in London, to keep its special culture and to continue to operate from dual locations after the sale. The lessons for anyone looking to pull the same trick are clear: position yourself well, get prepared in advance of the sale and focus on high margin business that substantiates your creative claims to offer a real value-add to clients.”
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