Newly-formed, employee-owned company MSQ Partners has completed a buy-out of all the agencies that previously comprised listed group Media Square.
This includes the design consultancies within the Holmes & Marchant group, alongside ad agencies including CST The Gate.
The move comes after administrators had been appointed and Media Square shares had been suspended.
The buy-out has been funded by debt package from Lloyds Banking Group and an equity contribution from MSQ senior management and leaves the new entity with debt at less than half the level previously borne by Media Square.
A statement from MSQ Partners says, ‘Media Square had an unsustainable level of debt which dated back to a series of prior acquisitions, most notably the £63 million MSG acquisition in September 2005.
‘The administration only covered the holding company and the individual agencies, which operate within their own separate legal entities, continue to trade as normal.’
The status of individual consultancies with MSQ and headcount are unaffected by the buy-out.
Peter Reid, founder of MSQ Partners, says, ‘I do believe that in the medium-to-long term the group can now focus on delivering great client work, as a public company you can sometimes get distracted from that.’
He adds, ‘The debt burden of Media Square was holding back these businesses… 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 the full potential.’
David Worthington, chairman of design at Media Square, has described the buy-out as ‘a very constructive outcome’.
The agencies that make up MSQ Partners will employ more than 650 staff, have annual revenues of approximately £45 million and have operations in the UK, US, Hong Kong, China and Singapore.