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Financial Dynamics sold to US company in $260m deal

LONDON - City PR firm Financial Dynamics has been bought by US consultancy FTI in a $260m (£137m) deal, the latest chapter in a long-running saga of buyouts and acquisitions of the agency.

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FTI will pay $215m in cash with the remaining sum to be paid in notes and stock. Financial Dynamics has been owned by its management and the private equity firm Advent International since 2003, when the partnership paid just £26m to parent company Cordiant Communications in a buyout deal.

The agency has had a long history of management shifts and buyouts. It was founded in 1986, acquired Broad Street Associates in 1987, and was then bought by French advertising agency BDDP in 1991. BDDP was subsequently acquired by GGT in 1996, and in 1998 Financial Dynamics managers bought the agency back.

A year later, there were new owners in the form of Lighthouse Group, which in turn was acquired by Cordiant Communications in 2000. Three years later, with an unstable Cordiant being acquired by the WPP Group for £266m, chief executive Charles Watson headed another management buyout at the agency.

Watson has now signed a new contract that ties him in for five years. He said that FTI and Financial Dynamics made a perfect commercial, cultural and strategic fit.

"We live and operate in complementary markets and practices where we enjoy numerous relationships and interests in common. The potential for collaboration is compelling.

"Joining forces with a recognised leader in the consulting world that, like FD, focuses on critical issues that confront clients, also marks a landmark for the communications industry -- creating the optimal environment in which FD will continue to thrive and grow for the benefit of all our staff and, most importantly, or clients."

According to reports, Watson will net £6.6m in the deal and Declan Kelly, who is CEO of its US operations, will get £5.5m. Several other senior executives stand to make around £1m each from the sale.

FD is best known for its work on City deals such as mergers and acquisitions and IPOs. In 2005, it moved into public affairs when it acquired LLM Communications, the lobbying agency once famous for its connections with New Labour, having been founded only months after Labour's 1997 general election victory.

FTI provides problem-solving and technology consultancy to corporations, financial institutions and law firms. It has 25 offices in the US and operations in Europe, Asia and Australia.

Financial Dynamics has 450 employees worldwide and offices in Europe, the US, the Middle East, Africa and Asia.

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