Advertising titan, WPP Group Plc. (WPPGY) steps forward to expand its reach in France through the acquisition of Paris-based, i&e SAS. The acquisition was carried out through the company’s global public relations and public affairs firm, Burson-Marsteller. Financial terms of the transaction were not disclosed.
The communications consultancy specializes in providing public relation services and currently has staff strength of more than 110 people. As of December 2011, the agency generated over €13 million in revenue and had €5 million in gross assets.
WPPGY’s acquisitions and investments are all aimed at expanding the company’s operations in fast growing emerging markets and enabling access to vast untapped markets in those regions. In the fiscal year 2011, WPPGY made roughly 24 acquisitions in new markets, 32 in new media and 8 in consumer insight. The company’s acquisition of i&e will enable WPPGY to expand its client base in France by providing reputation management, brand marketing and change management services.
Also, lately, WPPGY signed agreements to acquire assets of one of the leading digital agencies, AKQA Holdings, Inc. The latter was founded in 2001 and its clients include Delta, Diageo, EDF, GAP, Google, Microsoft Xbox, Nike, Target, Unilever and Virgin Money, among others.
AKQA Holdings employs over 1160 people. As of December 31, 2011, the agency earned $189 million in revenues and had gross assets of $282 million.
The current Zacks Consensus EPS Estimates for WPP plc are $5.65 and $6.31 for the fiscal years 2012 and 2013, respectively. The estimates represent a year-over-year growth of 5.10% for 2012 and 11.52% for 2013.
This Dublin, Ireland-based advertising and communications services provider competes with other industry players including Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC) and Publicis Groupe SA (PUBGY.PK).
We currently maintain a Neutral recommendation on WPPGY. The stock also bears a Zacks #3 Rank, implying a short-term (1-3 months) Hold rating.
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