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WPP forges ahead on its acquisition trail

Group takes stakes in Latin American innovative software company Globant and Sydney-based experiential marketing agency, PLAY Communication

WPP GroupWPP has announced that it is to acquire a 20 per cent stake in Globant – an emerging worldwide leader in technical expertise, design and creative capabilities in the development of software products that can be applied to digital marketing campaigns on a global scale.

Founded in 2003, Globant has been recognized consistently in the annual Global Services 100 List as offering best practice in its business area, ie, state of the art digital marketing spaces, including mobile, gamification, social networks, cloud computing, big data and e-commerce.

Its clients include American Express, LinkedIn, Google and Coca-Cola, as well as several WPP companies, including, JWT, Young & Rubicam, Grey, GroupM and Kantar.

A rapidly growing business, Globant's net revenue for the year ended December 31, 2011 was US$90m and half year net revenue to June 20, 2012 was US$56.9m. WPP is to invest approximately $70m in acquiring its stake.

From its start-up head office in Buenos Aires, Globant now has 17 branch offices, including San Franciso, Boston and London.

“Increasingly, clients want better coordination between their IT departments and their marketing departments, between their chief information officers and their chief marketing officers,” said WPP CEO Sir Martin Sorrell.

“There are many consulting companies or digital agencies that are expert in one function or the other.  Few, if any, do both and even fewer can integrate deep technical and creative capabilities on a global scale as Globant does. Partnering with Globant will allow our companies to increasingly provide our clients with insights and skills that will make their digital marketing efforts even more effective and simpler to manage at both the front and back ends.”

On adding a further Latin American company to its portfolio, Sorrell is quoted in the New York Times as saying: “This is Latin America's time.” He is said not to be deterred by concerns over the shaky economy in Brazil or political tension in Argentina.

The second latest acquisition is by WPP Group's wholly owned operating company, GroupM, which is taking a majority stake in PLAY Communication, a leading experiential marketing agency based in Sydney which was founded in 2002. PLAY offers activation, sponsorship, digital and branding services. The company employs around 23 people and clients include Volkswagen, Qantas and the Charles Darwin University.

In 2012 WPP completed 25 transactions with companies that are in either faster growing markets, or faster growing sectors such as digital, data or application of technology, or both. WPP's digital revenues (including associates) are budgeted at over US$6bn in 2013, representing 33 per cent of the group's total revenues, which in 2011 came to US$16bn. WPP has set a target of 35-40 per cent of revenues to be derived from digital over the next five years.  

7th January 2013

From: Marketing



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