WPP Group Plc.
) through its media investment operation company, GroupM signed an
agreement to acquire South-Korea based media planning and buying
company, Alchemedia Inc. Financial terms of the transaction were
The acquisition will bolster GroupM's presence in Korea through
an easy access to Alchemedia's solid client base. Together, the
companies will have big names including Audi, GSK, Hicos
Fragrances, IBM, LG Electronics, Lock & Lock, Procter &
Gamble, Sejung Fashion, Red Bull, Rolex and VW, among others on
their client list.
Alchemedia was founded in 2004 in Seoul. As of December 31,
2011, the company generated over KRW 1.4 billion in revenue and had
KRW10.0 billion 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 Alchemedia will thus enable WPPGY to
expand its client base in South Korea, where media spend is
predicted to increase 9.5% in 2012.
Also, lately, WPPGY's wholly-owned subsidiary Grey Group Germany
announced its plans to fully acquire Frey G2 as against a 50% stake
in the latter. Post acquisition Frey G2 will be renamed Grey
Shopper and will have Procter & Gamble, Coca-Cola and Pfizerin
its client kitty.
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.
Omnicom Group Inc.
Publicis Groupe SA
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.
INTERPUBLIC GRP (IPG): Free Stock Analysis
OMNICOM GRP (OMC): Free Stock Analysis Report
WPP PLC (WPPGY): Free Stock Analysis Report
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