A management buyout of Media Square Group has taken place with the company set to continue to focus on growing its core agency brands, it has said.
The group has been acquired by employee group MSQ Partners for a reported £11m, following an announcement earlier to the market that it had been unable to secure further funding from its bank Lloyds.
The new group has said that it will have a strong financial structure, with debt reduced to less than half of the level that was previously held by Media Square.
Peter Reid and Roger Parry will lead the privately owned company, which will hold the same structure from that of Media Square PLC, with no jobs being lost it is understood.
Peter Reid, founder of MSQ Partners, commented: “This is an extremely positive development for our staff, clients and suppliers. The deal provides a platform for the group to build on the significant progress made by its agencies at an operating level over the past two years, in particular. The debt burden of Media Square was holding back these businesses and as part of the transaction a much more appropriate and sustainable financial structure has been implemented within the group.
“An employee-owned structure where the employees take the majority control and can share in the future success of the business is one that we believe will see our agencies realise their full potential.”
Luke Mugliston, chief executive officer of CST The Gate, added: “Working for an agency that has the scale and specialist skills of an organisation such as ours but where the employees have a share in the running and future success of the business has great appeal I’m sure for current and future staff. I admire many employee-owned businesses. The cultural benefits that they derive from such a structure have significant benefits for the clients and customers they serve.”
The Group is made up of agencies such as The Gate Worldwide, CST The Gate, Smarts, IAS B2B, TwentySix, Holmes and Marchant, Fourninety, and LloydNorthover.
Updated: The Drum understands the the legal action against Porta Communications CEO David Wight undertaken by Media Square will proceed.