Advertising titan, WPP plc (WPPGY) recently agreed to acquire CIC, a social media research and consulting agency in China. The acquisition will be given effect through the company’s wholly-owned operating company, Kantar Media. Completion of the transaction is subject to regulatory approvals.
CIC was founded in 2004 and employs over 120 people. The company generated roughly RMB29.9 million in revenues for the year ended 31 December 2011. Gross assets for the same period were RMB 22.4 million. The company has a client base including L’Oreal, Pepsi, Dell, Nike and Burberry.
The acquisition complies with WPP plc’s efforts to expand its operations in fast growing emerging markets, thus enabling ready access to vast untapped markets in those regions. WPP plc’s attempts at making inroads in the Chinese market, considered to be one of the few emerging economies, will also be eased out by CIC.
Of late, Kantar network agreed to acquire a majority interest in Karachi-based insight and consultancy company, Oasis Insights (Private) Limited. Further, in October 2011, Kantar raised its stake in Lanka Market Research Bureau (Private) Limited (LMRB) from 49% to 100% by purchasing the latter’s remaining shares.
The current Zacks Consensus EPS Estimate for WPP plc is $5.23 and $5.70 for the fiscal years 2011 and 2012, respectively. The estimate represents a year-over-year growth of 39.80% for 2011 and 8.93% for 2012.
Based in Dublin, Ireland, WPP Group plc. provides advertising and communications services worldwide. The company faces stiff competition from 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.
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