Last week, Ireland-based advertising major, WPP Group Plc. (WPPGY) announced the acquisition of a Canadian consultancy firm, Ascentum Inc. Financial terms of the transaction were not disclosed.
The acquisition was consummated through the company’s public relations and public affairs firm, Hill+Knowlton Strategies Canada. The addition of Ascentum to the company’s portfolio is in line with WPPGY’s strategic objective of expanding its reach in emerging markets.
Ascentum was founded in 2003 and is based in Ottawa, Canada. The acquired assets bring with it a solid client base including governmental bodies, business and non-profit organizations.
Acquisitions have been WPPGY’s primary tools for expansion in new markets. Of some of the recently announced transactions, the agreement for acquisition of assets of Turkey-based fully integrated company, Manajans/JWT by WPPGY’s affiliate JWT and Possible Worldwide’s majority stake acquisition in full service digital marketing agency Fortune Cookie (:UK) Limited deserve special mention.
In 2011, WPPGY made roughly 24 acquisitions in new markets, 32 in new media and 8 in consumer insight.
The current Zacks Consensus EPS Estimates for WPP plc are $5.62 and $6.29 for years 2012 and 2013, respectively. The estimates represent a year-over-year growth of 4.52% for 2012 and 11.88% for 2013.
WPPGY provides advertising and communications services and competes with other industry players including Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC) and Publicis Groupe SA (PUBGY).
We currently maintain a Neutral recommendation on WPPGY. The stock also bears a Zacks #3 Rank, which implies a short-term (1-3 months) Hold rating.
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