Morrow Sodali shakes up corporate PR with Citadel-Domestique merger
Two of Australia’s most prominent corporate communications firms, Domestique and Citadel-Magnus, will no longer exist as distinct brands after being acquired by Morrow Sodali, says the international boss of the private equity-backed consultancy.
Christian Sealey said Morrow Sodali, which is backed by TPG Capital, worked with more than 75 per cent of the country’s 100 largest listed companies – and there was “plenty of runway”. Morrow Sodali, once a proxy solicitation and shareholder engagement firm, now has a corporate governance team, a research division, a sustainability practice and investor relations experts. It swooped on Domestique to add to its growing communications wing, and acquired London PR firm Powerscourt in October.
Morrow Sodali international chief Christian Sealey. Louie Douvis
This time last year, Mr Sealey paid around $50 million for Citadel-Magnus. Domestique, which is majority-owned by its partners Ross Thornton, Lauren Thompson and Jim Kelly, is believed to have sold for a similar amount. Both deals included part cash and part scrip in the Morrow Sodali business, which is eyeing a US listing at some point.
The challenge with buying top financial communications firms such as Domestique and Citadel-Magnus is that they cover, on two estimates, about half of the market’s mergers and acquisitions. Crossover in clients has already prompted concerns – in Washington H. Soul Pattinson’s bid for Perpetual, for example. Domestique’s Jon Snowball advises Perpetual, while Soul Patts has Citadel’s James Strong in its corner.
“We have a couple of floors here, we have all the systems in place to do that – we’re pretty professional around how we manage conflicts and deal with that,” Mr Sealey said. “We wouldn’t have a business if we couldn’t manage conflicts properly.”
That may become harder under plans to re-brand Morrow Sodali’s acquisitions under a unified name.
“We’re not going to destroy brand equity if we don’t need to. That said, we are moving towards a single monolithic brand,” Mr Sealey said. “I mean, we’re not going to be a house of brands, I don’t think – that’s not our desire or TPG’s desire.”
He didn’t, however, rule out keeping a separate team in case of conflicts of interest.
“We might decide to keep a conflict brand if we need to, but it just hasn’t been a big issue for us in any of the planning and the diligence and all the work that we’ve done,” he said. “It’s just not coming up as a major problem at this point.”
Morrow Sodali has 2000 clients globally, 450 of which are in Australia. Its headcount follows a similar ratio – 500 globally, 120 in four local offices. Mr Sealey has previously spoken about boosting Morrow Sodali’s revenue to $500 million over the next few years.
Both Domestique and Citadel have staff with large personalities, Mr Sealey said, alluding to a recent report in The Australian Financial Review’s Rear Window column linking Citadel’s Brett Clegg, a former editor at the Financial Review, to angry emails about a restructure. Mr Sealey declined to provide details, but said the structure needed to be simplified, noting that he had more than 40 people reporting directly to him.
“I’m going through an org restructure. The challenge with any of these businesses when we buy them is to make sure that we don’t take anything away from our leading practitioners,” Mr Sealey said, adding he was confident the company had locked up the top talent at Citadel and Domestique for some time.
“It’s a multi-year lock. Hopefully, everyone’s so energised, excited about the prospects ahead that it’s just a non-event,” he said. “It hasn’t been a big discussion point in the negotiations.”
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