Intriguing rumours and news flying about today regarding the potential future direction and ownership of Brands2Life. I have been doing some quick back of a fag packet calculations. Whether using the old formula of the average of the previous three years revenues with a multiple of 3 to 4 or the Loewy method of 5 or 6 times pre-tax profit (assuming a healthy 25% margin) the agency would be worth around the £10m mark on available figures. Now Brands2Life has just hired Livingstone Partners who apparently specialise in company sales, acquisitions and private equity transactions with deals ranging from…. £10m to £100m plus’. Giles Fraser is remaining tight-lipped claiming, ‘We’re a hot company. Sometimes we’re looking for buyers, and sometimes we’re looking to buy.’ Interesting he used the word ‘Hot’.
Having passed the seven year mark it wouldn’t be unusual for Fraser and Scales to look at their options and consider the sale of a strong fast growing agency with an excellent reputation and enviable client list. What I’m debating is whether such a move if it does happen, is a signal similar to the recent sale of Foxtons that like the housing market the tech pr bubble could be about to burst. Or, as with Loewy’s acquisition of Mantra, that the prospects for the sector are in fact broadly positive?