WPPGY Buys Crowdverb & Carnation - Analyst Blog

By Zacks Equity Research,

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Advertising titan, WPP Group Plc. ( WPPGY ) recently concluded acquisition of Crowdverb's assets via its wholly owned subsidiary Burson-Marsteller. Financial terms of the transaction were not disclosed.

Seattle, Washington-based firm, Crowdverb is well known for its data-driven approach to manage brand reputations and product promotion. The acquired assets compliment WPPGY's public relations/public affairs business and will be integrated into Direct Impact, a unit of Burson-Marsteller.

Besides the Crowdverb acquisition, the company's operating unit Possible Worldwide purchased the entire shares of Hungary-based, Carnation Internet Tanácsadó Zrt. The latter provides full-service digital marketing services.

Carnation's client base includes big players like Coca-Cola, MTV, Procter & Gamble, and Telenor. The agency generated roughly HUF 1,341 million in revenues and had gross assets of HUF 1,431 million for the year ended 31 December 2011.

WPPGY's sole objective, through these strategic acquisitions, is to expand its operations in fast growing emerging markets and gain access to vast untapped public relations/public affairs as well as digital media markets in those regions. In the fiscal year 2011, public relations/public affairs market accounted for around 8.8% of total revenue while digital media represented about 30% of total revenue.

The current Zacks Consensus EPS Estimates for WPP plc are $5.75 and $6.30 for the fiscal years 2012 and 2013, respectively. The estimates represent a year-over-year growth of 6.84% for 2012 and 9.53% for 2013.

Based in Dublin, Ireland, WPP Group provides advertising and communications services worldwide. The company provides stiff competition to its peers like Interpublic Group of Companies Inc. ( IPG ), Omnicom Group Inc. ( OMC ) and Publicis Groupe SA (PUBGY.PK).

We currently maintain a Neutral recommendation on the stock.

INTERPUBLIC GRP ( IPG ): Free Stock Analysis Report
OMNICOM GRP ( OMC ): Free Stock Analysis Report
WPP PLC ( WPPGY ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: IPG , OMC , WPPGY

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