The DRPG acquisition of brand film and events agency Firehouse marks yet another expansion of a business that simply refuses to stop growing rapidly. We’ve had a look at what drove the deal.
The deal, announced on 14th February, follows an established pattern of filling a gap in the DRPG portfolio. Past acquisitions have been characterised by a desire to leave the acquired business largely intact and keep trading under the same brand. If this sounds too good to be true, our investigations suggest it mostly does work that way, even when there’s a bit of strain in the integration.
This time, the gap being filled is harder to grasp. The Firehouse skillset, client list and sector focus don’t seem that different to DRPG. Parmenter joked he was capitalising on where there are nice bars in London, adding Farringdon to the existing Covent Garden office.
Instead, it’s all about the cultural fit, and the ability to get the deal over the line with sensible terms on both sides. Parmenter commented that Firehouse do everything – even the small things – exceptionally well, an ethos that aligns closely with DRPG.
Don’t expect the deal flow to dry up any time soon. We understand acquisitions are part of the plan to grow DRPG’s revenues from £30m in 2018 (up 46% year on year) to £100m in five years. There’s no shortage of willing targets who want to share the ambition. Specialist agency owners will have to form an orderly queue.
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Meanwhile organic growth is being enhanced by international expansion driven by Dagmar Mackett. Parmenter sees a big opportunity in Germany and it’s unlikely he will stop there. Yet more expansion is under way at the Hartlebury HQ, a former Spitfire factory that has grown into a significant creative hub.
For Firehouse, the DRPG acquisition opens access to a much bigger set of resources in Hartlebury and the budding international network. CEO Mike Harper emphasised the need to continue offering a highly customised service, and added that Firehouse’s relationships with existing suppliers would continue.
Like a number of agencies, Firehouse started out with a focus on video, adding live events over time as video budgets stagnated. There’s a sense in this deal and elsewhere that moving image skills are highly valued again. Parmenter commented: ‘Our commitment to and aspirations in film and video are very strong.’
Firehouse clients like Kingfisher, B&Q, RBS, O2 and Shell are unlikely to notice a big difference immediately. But past experience suggests they can expect an invitation to HQ some time soon. They should accept – it’s worth the trip.