Publicis buys New York PR firm Kekst

NEW YORK/PARIS (Reuters) - Storied New York public relations advisor Kekst & Co on Wednesday sold out to French advertising and communications company Publicis Groupe SA (PUBP.PA) for an undisclosed sum.

Kekst, known for advising on high profile financial takeovers, was founded in 1970 by its current chief executive, Gershon Kekst, 73, and employs about 70 people.

The company, based on Madison Avenue, New York, has advised on more mergers and acquisitions than any other public relations agency over the last two decades, according to data from Corporate Control Alert.

Kekst is famed for advising on deals like the lengthy, frenzied battle for RJR Nabisco, the leveraged buyout in the 1980s which was immortalized in the book "Barbarians at the Gate". Kekst's client in that deal was buyout giant Kohlberg Kravis Roberts.

Kekst-advised deals were significantly above those of its rivals for the first half of 2008 in the United States, according to data from M&A research firm Mergermarket.

"Our business is doing very well, said Jeffrey Taufield, senior partner at Kekst, in an interview. "Revenues for the first half of 2008 were up over a year ago. Also net new clients for the first half of 2008 are up significantly over a year before -- that's across the board, not just M&A."

Publicis, led by Maurice Levy, announced the deal. Gershon Kekst said in a statement that he had known Levy for 20 years.

One industry insider who asked not to be identified, but is not involved with the deal, speculated that the transaction could be worth around $150 million.

The figure assumes estimated profits of $20 million and an estimated deal multiple of 6 or 7 times, plus a premium, that person said.

Kekst declined comment on a deal value.

The deal means that two major New York M&A PR advisory firms are now owned by French companies.

Rival Abernathy MacGregor Group, also based on Madison Avenue, New York, was bought by French marketing services company Havas (EURC.PA) in 2000.

Adam Miller, president of Abernathy MacGregor, said the partnership worked well. "Being part of a global organization has been immensely helpful for us," he said in an email. "In fact, I think having a true international presence is a necessity in today's market."

Of the other major financial PR firms in New York, Sard Verbinnen & Co is in the process of buying itself in a management-led buyout from UK-based communications firm Huntsworth Plc. Other rivals, such as Brunswick and Joele Frank, Wilkinson Brimmer Katcher also are independent.

Kekst worked on 67 deals in the first half of this year, valued at $108 billion, advising companies including NYMEX Holdings Inc NMX.N on its takeover by CME Group Inc, valued at around $9 billion, and Electronic Data Systems Corp EDS.N on its $12.6 billion takeover by Hewlett-Packard Co (HPQ.N), according to Mergermarket.

Kekst was followed in terms of deal value by Brunswick at $53 billion, Joele Frank, Wilkinson Brimmer Katcher at $38 billion, Owen Blicksilver PR at $34 billion, Abernathy at $33 billion and Sard Verbinnen at $26 billion.

(Reporting by Megan Davies in New York and Sudip Kar-Gupta in Paris; editing by Jeffrey Benkoe and Carol Bishopric)