PPHC acquires MultiState Associates for an initial consideration of $22 million

LONDON, UK: Public Policy Holding Company (AIM: PPHC), the US-based government relations and public affairs group, announced the acquisition of MultiState Associates Inc., one of the largest US-based state and local government relations specialists, for an initial consideration of $22 million.

The acquisition will be substantially and immediately accretive to the Group’s underlying earnings.

MultiState is a leading provider of state-based government relations services, state issues tracking and compliance solutions. Founded in 1984 and located in Virginia, the firm represents some of the world’s best-known organisations on issues of local, state and national importance.

This is PPHC’s second significant acquisition since IPO in December 2021.

The acquisition is in line with the Group’s inorganic growth strategy and broadens its offering into state-level advocacy and public relations, offering clients comprehensive policy solutions across jurisdictions. MultiState’s services are highly complementary to PPHC’s with its strength in research and compliance adding to and enhancing PPHC’s broader client offering.

As a wholly-owned subsidiary of PPHC, MultiState will retain its distinct brand identity and its long-standing management team and staff.

The initial consideration of $22 million was funded 80% ($17.6 million) in cash and 20% ($4.4 million) through the issue of new common shares in PPHC to the owners of MultiState.

The Group has separately announced today that it has entered into a $17 million credit facility, which has partially been deployed alongside balance sheet cash to fund the cash element of the initial consideration.

Further earnout payments are contingent on MultiState achieving profit growth targets between 2022 and 2027, promoting alignment with the Group’s growth objectives.

MultiState operates in all 50 US states and across Canada, servicing over 300 corporate clients, in line with the PPHC’s client profile, including several Fortune 500 constituents.

Stewart Hall, CEO of PPHC, commented: “The acquisition of MultiState fits perfectly with our strategy of broadening our geographic footprint into key US state capitals and metropolitan areas, while extending our offering by adding key service capabilities in research and compliance.

MultiState has a talented team and its strategic capabilities will solidify PPHC’s leadership position as the largest and most comprehensive public policy firm in the US. Linking our well-established businesses in Washington DC, Sacramento, California and Boston, Massachusetts to MultiState’s network in 50 states makes the Group uniquely suited to support corporate clients in the most complex risks and opportunities they face.

“Our growth in the resilient and fragmented $17+bn US strategic communications market is driven by increased inter-connectedness of federal, state and international policies and risk exposure. I am confident that our combined businesses will benefit greatly from new capabilities, new geographies and new client opportunities.”

Joseph Crosby, CEO of MultiState, commented: “PPHC is bringing together highly specialised government relations businesses at a scale that’s never been seen. This Acquisition marks a significant milestone during MultiState’s 40th year in business as well as for each of my talented partners and colleagues. It also marks a milestone for our clients and the industry, as federal and state policy issues are evermore interdependent and require the professionalism and seamless integration that only PPHC and MultiState now offer.”