Price Estimated at $12 Million : Hill & Knowlton Will Buy Carl Byoir Firm

Hill & Knowlton, the nation’s second-biggest public relations firm, said Tuesday that it has agreed in principle to acquire most of the business ofNo. 3 Carl Byoir & Associates in a deal that could make it the nation’s largest public relations firm.

The price was not disclosed, but a source familiar with the deal and speaking on condition that he not be identified said it was $12 million.

Robert L. Dilenschneider, president and chief executive of Hill & Knowlton, said the transaction would bring his firm a client roster that accounted for fee income of more than $17 million in 1985.

“The acquisition fits our growth strategy well,” he said in a statement. “Not only are we getting 350 excellent people and a fine client list, but we are strengthening our existing offices at the same time.”

Hill & Knowlton, a subsidiary of the advertising and communications concern JWT Group Inc., would get Byoir’s offices in Boston, New York, Washington, Atlanta, Dallas, Los Angeles, San Francisco and London, the announcement said.

Byoir’s parent company, the advertising concern Foote, Cone & Belding Communications, will retain Byoir’s Golin-Harris Communications in Chicago; Lewis, Gilman & Kynett in Philadelphia, and Wellbeck Public Relations in London, according to Abbott C. Jones, Foote, Cone president.

In June, Hill & Knowlton announced that it had agreed to buy Gray & Co. Worldwide Communications, a Washington-based public relations and public affairs firm. The Byoir deal would lift Hill & Knowlton ahead of Burson-Marstellar, the nation’s largest public relations firm last year.

According to O’Dwyer’s Directory of Public Relations Firms, Burson-Marstellar had 1985 fees of $104.6 million. Hill & Knowlton was second at $78 million, Byoir third at $32.3 million and Gray eighth at $15.6 million. The fees from Gray’s clients and $17 million in fees from Byoir clients would have boosted Hill & Knowlton’s 1985 fees to more than $110 million.

Dilenschneider said he expects the Byoir deal to close by the end of September.

He said the two acquisitions will boost the number of its employees worldwide to 2,100.