Publicis' MSL Group Acquires Schwartz Communications

PR Network Looks to Boost Health-Care and Technology Portfolio Through Merger

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MSL Group, Publicis Groupe 's $405 million PR network, has acquired Schwartz Communications in a move to strengthen its health-care and technology portfolio.

MSL Group CEO Olivier Fleurot
MSL Group CEO Olivier Fleurot

Effective immediately, the Massachusetts-based PR shop will operate under the name Schwartz MSL in the U.S, and the firm's offices in London and Stockholm will be integrated into existing MSL operations abroad. Schwartz President Bryan Scanlon and Chief Operating Officer Ari Milstein will run Schwartz MSL, reporting to Jim Tsokanos, President of MSL Group Americas.

Mr. Scanlon will also become head of the North America technology practice. On the West Coast, MSL Group's technology practice will become part of the Schwartz MSL agency in San Francisco.

"Our aim is to become one of the top three global networks and companies, so we've been looking at acquisitions in many countries," MSL Group CEO Olivier Fleurot told Ad Age . "We have identified gaps in our network. Some are geographic; some are about sectors and industries; and we think Schwartz is the perfect fit."

Neither organization would disclose the terms of the deal, but the mid-sized, Massachusetts-based firm finished 2010 with just more than $25 million in fee billings, not including expenses, and 2% growth over 2009. More than 30% of its fee billings in 2010 came from its San Francisco office, which saw a 15% increase last year, said Mr. Scanlon. The firm would not disclose projections for 2011.

The acquisition should bolster MSLGroup's health-care expertise in the biotech and devices categories, as well as strengthen its technology portfolio and its presence on the West Coast and in New England. Its sixth acquisition in the category this year, the move also reflects a larger goal by Publicis Groupe to grow its global PR operations. The other five global agencies this year include: Genedigi in China; Andreoli MSL in Brazil; 20:20 MSL, a social-media firm in India; Eastwei MSL in China; and Interactive Communications Limited in Taiwan, which is now called ICL MSL.

Mr. Tsokanos said the acquisition doubles the firm's health-care offering, adding: "Areas we've been weak in have been technology and public affairs. We want to continue to diversify the business."

For Schwartz, it will be an opportunity to "play on the global stage," said Mr. Scanlon. "We have four offices and we're strong in our regions, but we're not a global firm by any means."

He said that the acquisition won't result in layoffs, and the agency plans to hire in the coming months. Schwartz's current clients include GE Healthcare-Americas, Kimberly-Clark Healthcare, Accuray (medical devices) and MicroStrategy (IT).

The agency, founded by Steve and Paula Mae Schwartz in 1990, has 180 employees in four locations: Boston, San Francisco, Stockholm and London. The Schwartzes have been hands-off for years, and following this deal they will no longer have any official connection to the agency, said Mr. Scanlon. The husband and wife founded film company Chockstone Pictures in 2004 and continue to focus their efforts on that venture.

In 2009, Publicis Groupe consolidated MS&L Worldwide, Publicis Consultants and Publicis events, and a year later it branded the network MSLGroup. In 2008, the holding company acquired corporate and financial PR firm Kekst and Company.

"[Publicis chairman and CEO] Maurice Levy decided we should become one of the most attractive PR and events organizations," said Mr. Fleurot. "On a more global level we're still looking at investing in digital, and more in emerging markets."

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