Publicis unit MSL to buy public relations agency Perfect Relations

By Pritha Dasgupta

KOLKATA: MSLGROUP, the public relations company owned by French advertising conglomerate Publicis Groupe, is set to acquire Perfect Relations, one of India's oldest independent PR firms started by Dilip Cherian and Bobby Kewalramani two decades ago. The deal values Perfect Relations at Rs 150-200 crore, about four times its annual revenue, said a top executive in the know who didn't want to be named.

This is yet another deal in which a foreign-holding company is lapping up a local PR firm. In 2005, Burson-Marsteller acquired Indian firm Genesis PR, while in 2011 Omnicom Group's Ketchum unit bought a 51% stake in Mumbai-based Sampark PR. MSL itself took over Hanmer in 2008 and 20:20 Media in 2010.

According to senior executives at both Perfect Relations and MSL, as well as sources at Perfect Relations' clients, the deal is likely to close by mid-December, following which the local firm will be called MSL-Perfect to reflect the new ownership.

Perfect Relations, with annual revenue of Rs 50-60 crore, works with some of the biggest global and India brands, including Coca-Cola, Godrej, Shoppers Stop, Hypercity, Diageo, Pizza Hut, KFC, Saffola, General Mills, Franklin Templeton, Saint-Gobain and Sony.

In September, Valerie Pinto, chief executive of Perfect Relations, quit after a 16-year stint at the company. Sources say post acquisition, Cherian and Kewalramani also plan to move on and not stay on the board even as consultants, like Sunil Gautam did post selling Hanmer to MSL.

"Usually, the acquiring company requests the founders to stay in the company at least for the initial three-five years and handhold through the transition period," one of the sources said.

According to people close to Cherian, he has been looking to sell the company since 2006-2007. Three years ago, he tried to strike a deal with New York-based Hill+Knowlton Strategies. "That deal did not go through because some of the accounts of Perfect Relations were unaudited," said an executive.

This time, Cherian and Kewalramani were in talks with WPP-owned PPR, MSL and Omnicom. "MSL offered them a better price as they (MSL) want to aggressively grow in the Indian market to compete with the only other independent PR agency, Adfactors," said another executive in the know.

Cherian didn't respond to an email seeking comment. MSLGROUP CEO Jaideep Shergill said: "Our group policy is very clear and doesn't allow us to comment on rumours and speculative information."

Several top industry executives ET spoke to said the reasons behind the deal were obvious. "When partnerships grow old, one needs a logical plan to exit and find ways to monetise it as well, which seems to be the reason why Cherian and Kewalramani wanted to sell," said one of them. "Secondly, this strategic deal will enhance Perfect's competitive positioning in the market and also bring in global expertise, knowledge and so on. In the last few years, the PR industry in India has become increasingly difficult environment to compete in, and thus the exit of Cherian and Kewalramani."

A top executive at MSL said the company has made strategic investments in India which will help it grow here vis-a-vis markets like the US or UK where the economy is flat.