- Media company Enero Group (EGG) has sold its 75 per cent interest in its public relations subsidiary, Frank PR
- Frank PR’s 25 per cent minority shareholders bought back the PR agency for a cash consideration of $1.5 million
- Frank PR contributed roughly 6.8 per cent of Enero Group’s net revenue for the 2020 financial year
- The sale of Frank PR will provide the company with additional capital for growth opportunities, including future potential acquisitions
- Enero Group closed 1.66 per cent in the red to $2.97 per share
Media company Enero Group (EGG) has sold its 75 per cent interest in its public relations subsidiary, Frank PR.
Frank PR is a U.K.-based, award-winning consumer PR agency, of which Enero Group acquired a majority interest in 2007. The remaining 25 per cent minority interest was retained by shareholders including Frank PR’s management team.
Those same minority shareholders have now bought back their PR agency by conducting a management buyout. The shareholders were led by Frank PR’s Chairman and founder, Graham Goodkind, and its Managing Director, Alex Grier.
The 75 per cent interest in Frank PR was bought for a cash consideration of $1.5 million. Graham Goodkind explained that the agency’s original shareholders were keen to take the business independent again.
Frank PR contributed roughly $9.3 million to Enero Group’s net revenue for the 2020 financial year. This represented approximately 6.8 per cent of the year’s revenue.
During the first half of the 2021 financial year, Frank PR contributed $4.3 million (or 5.3 per cent) of the company’s net revenue. After taking the $1.5 million cash consideration into account, Enero Group will recognise a non-cash loss on sale of roughly $9.5 million to $10 million, before the impact of income tax.
Despite the loss, Enero Group CEO Brent Scrimshaw said this sale coincides with a sharpening of the group’s focus on its core agencies.
“The Frank sale will provide additional capital to allocate to high growth opportunities across the global network of the Hotwire & Orchard brands along with BMF in Sydney, in addition to future acquisitions that accelerate capability across the group,” he said.
“Frank has been a significant contributor to Enero’s portfolio since joining the group 14 years ago, however, we also recognise that Frank’s independence is the most advantageous path forward for its future growth. We wish the management and the whole team at Frank all the best for future success,” he added.
Enero Group closed 1.66 per cent in the red to $2.97 per share.