Advertising titan WPP plc. (WPPGY) recently announced that it has acquired a minority holding in a leading youth media brand, Vice Holdings Inc.
With operations in over 30 countries, Vice Media runs a magazine and book publishing division, a music division, VBS.TV, Viceland.com, Virtue Worldwide, AdVice and a series of digital channels built around online content verticals.
Vice Media, founded in 1994, is based in Montreal, Canada. Its gross assets were approximately $34.3 million, exiting the fiscal year 2010. Leading clients include Intel, Dell, Levi’s and Vitamin Water.
We believe WPP plc emphasizes a lot on new and rapidly developing markets, new media and consumer insights. Recently the company signed agreements to acquire a leading full service digital agency in Vietnam, Who Digital. The completion of the transaction is subject to regulatory approvals.
Future seems very bright for WPP plc as the company is very well placed to reap benefits from its dominant market share in many areas. Margins and profit growth are also adequately supported by the company’s pricing power. Moreover, revival in the global economy has enhanced advertising spending by companies across the world.
Global advertising expenditure is expected to be approximately $502 billion in 2011, representing an increase of 5.8% over $474 billion in 2010, according to a report by GroupM. It is anticipated that expenditure in the U.S. would be roughly 29.4% of the global forecast, an increase of 3.7% over $142.5 billion in 2010.
WPP plc faces competition from its peers like Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC), and Publicis Groupe SA.
We currently maintain an Outperform recommendation on the company.
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WPP GRP PLC (WPPGY): Free Stock Analysis Report
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