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Vertigo Public Relations Feature

Vertigo Buyout

By The Drum | Administrator

January 10, 2008 | 5 min read

The surprise news that MC2 had acquired Vertigo, only nine months after its launch, broken online by The Drum this week, raised more than a few eyebrows among contemporaries in the north west. The value of Vertigo after such a short time trading was not expected to be sufficiently high to warrant a speculative acquisition based on intrinsic cash value.

Despite the value of Vertigo’s current contracted income exceeding specialist estimates – which had tended towards the conservative – the key factor driving the acquisition has been the presence and expertise of Vertigo founder and principal Nathalie Bagnall, who adopts the MDs role in MC2 following the acquisition.

“The reason we bought Vertigo really was to bring Nathalie in, and give her a business she can really make a difference on. To get her was very important. That is what I was looking at, rather than the value,” said Mike Perls, now installed as CEO of MC2, who confessed to being delighted at securing the business, complete with Bagnall’s expertise.

“The actual financials weren’t of interest to me at all. The thing that was driving it was bringing Nathalie in, bringing the team in, and bringing in their reputations on the brand side. There aren’t too many Nathalies around, nationally. She has proved herself at a very high level.”

Rose Lewis, corporate finance partner at Pembridge creative financial advisers, agrees that acquisitions such as this are rarely driven by financial considerations. Securing the services of the key player in the business is the principal motivator, regardless of financial expediency.

Worth selling

“Acquisitions like this look interesting. You have to look a bit deeper into why a start up would want to sell out so quickly. Given that it is not – for instance – digital, or a new service that it might be worth selling out to get good value, clearly this acquisition and sale has not been driven by building immediate value.”

“It is 100 percent tied in with the people, and very much tied in with the MD, Nathalie, who had a very good reputation at Communique. Clearly, MC2 has recognised the value of Nathalie. She is being brought in to be MD, so they have definitely targeted Vertigo for Nathalie.”

Despite being within only its inaugural financial year, Vertigo has exceeded the commercial expectations of seasoned analysts, securing business far in excess of its confirmed turnover for the nine month period.

“I was amazed at what Vertigo had actually achieved in the nine months it had been going,” said Perls.

“With the new business it had established, it had a contracted income of close to half a million pounds for year one, which is incredible.” However Perls confirms that the trading value of Vertigo, whilst healthier than generally known, was secondary to the desire of MC2 to secure the unique skillsets of Nathalie Bagnall, Paul Carroll, and the brand team at Vertigo.

“We haven’t bought it for the fee income,” he said. “I’ve known Paul Carroll for a long time, and I thought he did a fabulous job with Communique. I’ve known Nathalie for a long time and looked from afar at what she did from an operational point of view, taking that business from a £2m business to a £5m business. That’s a tricky stage, moving from medium to large.”

“Her skillset is taking scaleable businesses and being able to drive the possibilities, efficiencies, the systems, processes and performance management of the people in there.”

With the deal evidently being driven by personality factors, Lewis notes that the deal is unlikely to signify a trend towards acquisitions of start ups, nor a growth in the value of PR firms on the whole.

“Deals like this are done because of the relationships the individuals have. It would be difficult for a corporate financial house to go out and broker a deal like this,” she says.

“It is interesting to see acquisitions driven by the individual, rather than the organisation itself. Where there is skill shortage in a large organisation, these acquisitions make a lot of sense. Therefore their prospects are high because they are adding skill, rather than simply fee income.”


Rick Guttridge of Brazen PR concurs that the marrying of the two companies will be in the best interests of both parties, giving business expertise and headhunted talent to MC2, and providing Bagnall a secure platform to utilise her skills where they may be best applied.

“She is a fantastic operational person. In setting up Vertigo she has done really well. This move lets her do what she enjoys doing best – the business side of things,” he says. “MC2 have been quite wily. They have bought into a fantastic brain and a fantastic operator, and taken on a business that has done well.”

Guttridge believes shifting Bagnall into a less client facing role will play to her key talents. “Perhaps Nathalie wasn’t enjoying the client liaison side. Her past role at Communique wasn’t as client-facing. It is early in the growth of the business. Under normal circumstances, you wouldn’t expect people to have sold that early. But it obviously suits both parties.”

Overall, he and the Manchester agency scene seem united in believing that MC2 will be the stronger following the takeover.

“I don’t know what plans they have to grow the business, but they are ones to watch,” says Guttridge.

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