Here’s What We Learned About the M&A Market in 2024 and What We Expect to See in 2025.

In particular, public affairs and lobbying firms saw significant buyer activity last year.

Buyer demand in 2024 kicked off with Omnicom’s acquisition of Plus Communications, the DC-based Republican public affairs and political juggernaut. This was followed by the highly visible acquisition of FGS Global by private equity giant KKR.

There were a host of other transactions in this space made by private equity deal-makers. This included the acquisitions of Axiom Advisors and Monument Advocacy. Additional acquisitions were made by Public Policy Holding Company including Lucas Public Affairs and Pagefield Communications Ltd. in London.

PE-backed organizations such as Orchestra (formerly Berlin Rosen) also continued their acquisition binge by acquiring Small Girls PR and Civitas Public Affairs Group.

All told, according to the Davis+Gilbert M&A recap and as reported by Provoke, there were 80+ transactions executed worldwide in 2024. There were 28 first-time buyer independent agencies and 15 first-time buyer private equity firms.

Why have there been such highly visible acquisitions in this sector?

The U.S government has forecasted robust growth for public affairs and lobbying firms during the next decade (with some estimates as high as 900%). In addition to forecasted revenue growth, many public affairs and lobbying firms generate higher margins than public relations or advertising agencies.

Further, there’s still plenty of room for growth for these firms through geographic expansion into state capitals as well as the addition of services including creative, digital, data and corporate communications.

Our expectations for M&A in 2025.

We expect to see continued demand in the public affairs/lobbying sector. Private equity firms which made platform acquisitions in 2023-2024 will be back in the market looking for tuck-in opportunities. We are also aware that there are private equity buyers still looking for platform acquisitions in the PA and lobbying space.

Eventually, as interest rates decline, that will spark greater M&A activity by making money cheaper and should also drive up the multiples used to value acquisition targets. However, interest rates will likely decrease more slowly than experts predicted just a few months ago given inflation being stickier than we all hoped.

Current multiples for transactions involving private equity and other quality buyers will continue to be in the 6-7 times EDITDA range until interest rates drop significantly.

We believe that the appetite for acquiring healthcare agencies and creatively-driven shops will increase in 2025. Healthcare was the hot M&A area three or so years ago and then cooled off. We think it will become hot again this year.

Finally, we also predict that management consultancies and agencies driven by technology will look to acquire creative agencies in 2025.

If you’re thinking about selling your agency or acquiring one, here’s why Prosper Group can help you achieve the best outcome.

We work exclusively with marketing and communications agencies, PA firms and high-quality buyers who are willing to pay 6-7X multiples. In 2024 alone, we were involved in five successful transactions primarily in the public affairs and lobbying sector. Overall, we have managed more than 25 agency sales to both outside buyers and internal parties

Please contact Alex Halbur (Managing Partner/Los Angeles) or David Bosses (Partner/New York) if 1) you would like further context on the current M&A market or 2) you seek guidance on whether your agency would be viewed as a viable acquisition target by premium buyers.

There are two very different kinds of buyers. Learn more HERE.

We’re here to help you prosper.

Prosper Group exists to help the owners of independent marketing communications agencies achieve their ambitions and maximize the value of their life's work.

Our team of former agency leaders and owners focus their deep experience on implementing proven proprietary methodologies across our three practices of agency performance, owner exit planning and M&A transactions in order to drive owner and agency success.

To learn more about us, please visit www.prospergroup.net.