from Business AM, 26th 2001


MMSI prepares partial float to fuel expansion plans

Glasgow firm follows trend towards IPOs
Move to offer on AIM one of the first this year

By Paul Rogerson

A FAST-growing Scottish consultancy firm is to follow the trail blazed by the global giants and carry out a partial flotation to fuel overseas expansion plans and attract new talent. In one the first moves to float this year, Marketing Management Services International (MMSI), a strategic marketing consultancy, is to offer 20% to 30% of its business on the Alternative Investment Market (AIM) and will shortly appoint IPO advisers. The managing director, Gerald Michaluk, founded the company 13 years ago and now employs 20 full-time staff and 150 part-time staff from its Glasgow base. Within three years he plans to boost that to 720 with more than 100 full timers in Scotland. The company has offices in Swindon, and the US cities of Chicago, San Jose and Houston. MMSI specialises in gathering marketing intelligence for a client list that includes several of the world's top 500 companies.

The firm is the UK's fifth largest strategic marketing consultancy. "That was achieved with only 14 staff and one person bringing in new business. We expect to do much better this year," said Mr Michaluk. MMSI is following in the footsteps of giant global management consultancies. Firms such as KPMG, Accenture (formerly Andersen Consulting) and Pricewaterhousecoopers (Pwc) have either floated or considering the option. Consultancies of all sizes face a huge challenge in attracting and retaining scarce talent and want to be able to offer share options to staff. They also need capital to invest in the technology required for expansion. MMSI has set aside 10% of its stock for staff share options and hopes to lure consultants culled by downsizing at bigger firms. "Recent announcements of staff cuts in other consultancies such as Pwc have given MMSI added impetus to recruit professionals let go by the market-leading consultancy firms," Mr Michaluk said. "It looks like KPMG has started a trend and no doubt other consultancies will be watching to see what happens." Some listed consultancies have struggled to attract investor interest because revenues in the industry are project-related and therefore highly volatile. But Mr Michaluk said this was not a problem for MMSI. "We will not take projects on that are not long-term," he said. MMSI will move to a full listing if the AIM float is a success, Mr Michaluk said. He hopes the downturn in the US economy will boost sales of its services, in particular the firms strategic marketing model the Global Marketing Advantage Systems (GMAS). This allows MMSI to provide round-the-clock services using internet-based and other techniques, to provide customers, mainly in the information technology and electronics sectors, with detailed market intelligence.

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