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Outside investors are fueling conglomeration on the Democratic side of the consulting industry. Last fall, Stagwell Group, the investment firm founded by Mark Penn, acquired SKDKnickerbocker and has since purchased research firm NRG and Code and Theory, a digital agency.
Against the backdrop of Stagwell, which is backed by $250 million in funding from investors including former Microsoft boss Steve Ballmer, Bully Pulpit Interactive found its own financial backer in the form of Svoboda Capital Partners LLC.
Support from the Chicago-based private equity firm along with financial advice from AdMedia Partners helped BPI acquire The Incite Agency, the company said Thursday. Like BPI, Incite has deep connections to the Obama administration having been co-founded by Ben LaBolt and Robert Gibbs, who subsequently left the firm for a position with McDonald’s in 2015.
The cost of the deal wasn’t disclosed by BPI.
In an article published on Medium, BPI chief Andrew Bleeker and Incite’s LaBolt said both firms had the opportunity for a “traditional” acquisition like the ones being conducted by Stagwell. They refused, they wrote, because “we are building something new.
“Supported by Svoboda Capital Partners LLC we will have the resources to make the investments in people and technology to win hearts and change minds by breaking down barriers.”
Meanwhile, the new company, which will be integrated by 2017, will have a new slate of offerings. “With the addition of Incite’s team, BPI will be able to expand and offer message development, strategic communications plus crisis and reputation management,” the company said in a statement.
Corporate consolidation has been happening for years in the consulting industry and has helped many firms break out of the cyclical nature of the campaign business. Adam Sheingate, in his book Building a Business of Politics, noted that in 2010 Blue State Digital was acquired by WPP, the world’s largest advertising and public relations company.
“If it seems strange that Blue State Digital, a firm specializing in campaign services for Democratic candidates, would become part of a global advertising powerhouse, consider that WPP’s holdings include twenty-six firms in the United States alone that specialize in political consulting, polling, and lobbying,” he wrote. “These companies, in turn, form part of a worldwide group of fifty-six firms based in seventeen countries that specialize in public affairs, a somewhat vague category of activity that combines corporate public relations with grassroots lobbying techniques designed to mobilize or energize public support on behalf of a client, particularly in regulatory matters or other policy areas that potentially impact the bottom line. Because of the skills of its practitioners and the demand for their services, public affairs is an important and growing branch of political work.”
While some GOP firms, like Charlie Black’s Prime Policy Group, fall under the WPP umbrella, many of the small digital operations remain independent. That is causing consternation among some GOP operatives who have fretted that without any large M&A activity on the right, they will fall behind their rivals in the digital arms race.