Next 15 acquires Engine Group UK for £77.5m

Lake Capital bought the wider Engine Group, including its US and APAC arms, for £100m in 2014.

Engine Group's London offices
Engine Group's London offices

Next 15 Communications Group is set to buy Engine Group UK, owner of ad agency Engine Creative, for an enterprise value of £77.5m. 

Campaign's sister title PRWeek reported last week that Next 15 was in talks to buy the business after Engine's US private equity owner, Lake Capital, formally started the process to sell off its UK independent agency group last summer.

According to Next 15, the deal will be funded from its own debt facilities and the proceeds of a proposed placing of new ordinary shares in the company, raising up to £50m. It detailed that £61.7m will be paid in cash once the deal goes through.  

Engine UK has approximately 600 staff across three divisions: communications, creative and transformation.

As part of the acquisition, Engine Creative will merge with Next 15 agency Odd under the leadership of Odd group chief executive officer, Phil Fearnley. 

Next 15 said that Engine Creative brings a multi-award-winning team of more than 250 people, serving clients including Santander, E.ON, Sky, Cazoo and the Cabinet Office.

It argued that Engine Creative will complement its data-driven UK communications offering, which, in addition to Odd, includes Savanta, Shopper Media Group and Velocity.

The combined unit is set to be rebranded in the coming months to deliver a fresh proposition and identity. 

Meanwhile, the communications division, trading under the name MHP Mischief, and Engine Transformation would remain standalone brands under their existing leadership following the transaction.

In its latest set of financial results for the year ended 31 December 2021, Engine UK increased its net revenue by 18% to £88.6m and generated adjusted EBITDA of £11.8m.

Next 15 stated that it is “confident of delivering cost synergies of at least £3m from the year to 31 January 2024" and noted that the deal offers opportunities for cross-selling.  

It added that it also sees a “strong pipeline” of potential bolt-on deals.

Tim Dyson, chief executive of Next 15, said: “Acquiring this broad-based digital transformation, communications and creative business fits well with our track record and strategy of adding growth businesses that then contribute to our target of doubling the size of our business in the next three to five years. 

“Its three businesses are home to great talent and strong client relationships and provide multiple opportunities to expand and further apply our growth consultancy services.”


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