There was a time when companies making big deals could only turn to a handful for advice. But the growing demand for advice on takeovers, activist investors and corporate crises has widened that circle and increasingly led to the creation of new companies.
The most recent example is Collected Strategies, which was created by several executives from communications firm Joele Frank, Wilkinson Brimmer Katcher, along with Ed Hammond, a longtime M&A reporter for Bloomberg.
“Corporate news, whether it be transactions, high-profile crises or ongoing business activity, has evolved,” said Mr. Hammond, one of the founders, in a statement. “Communication advice should do the same.”
The company is entering a period of heightened scrutiny over Wall Street’s activities. Investment firms have become the focus of anger from both liberal and conservative groups. While deal closings have generally been down, last year was the busiest in four years for activist investors, who are taking stakes in companies and demanding change.
The increased need for advice may partly explain what drove the creation of the new communications companies. Investors in those deals are also attracted by the strong profit margins, as people are the primary cost driver.
CVC Capital Partners purchased a majority stake in the consulting firm Teneo in a deal that valued it at approximately $700 million in 2019. Two years later, Brunswick Group sold a minority stake to the merchant bank BDT. That same year, advertising giant WPP merged consulting firms Finsbury Glover Hering and Sard Verbinnen to form FGS Global. In April, private equity firm KKR took a stake in FGS Global, valuing it at approximately $1.4 billion
Joele Frank is one of the last independent firms. Mrs. Frank founded it in 2000. It has since become a mainstay in closing deals, advising the William R. Hewlett Trust in its 2001 opposition to Hewlett-Packard’s merger with Compaq and US Airways in its merger with American Airlines in 2013.
The executives leaving Joele Frank include Scott Bisang, who advised Twitter on its sale to Elon Musk last year; Jim Golden, who advised First Republic and PacWest banks during this year’s regional banking crisis; and Jude Gorman, who was the company’s chief operating officer.
Mr. Hammond of Bloomberg follows a tradition of star M&A reporters moving into corporate consulting work. Steven Lipin, a longtime Wall Street Journal reporter who covered that beat, joined Brunswick Group in 2001 and started his own practice, Gladstone Place Partners, in 2017.
