(WPPGY) WPP Expands Digital Arm

Advertising titan WPP plc. (WPPGY) announced that it has acquired 70% stake in Brazil based F.biz Ltda. The financial terms of the transaction were not disclosed.

Founded in 1999, F.biz Ltda. is the largest independent digital advertising agency in Brazil. Employing 200 people, F.biz serves clients such as Campari, Itaú, Vivo and NetShoes.

With this acquisition, the company is well placed to fulfill its objective of expanding its capabilities in the digital, direct and interactive disciplines. WPP plc will also extend its footprint in rapid developing markets.

As a Group, WPP plc generates revenues of over R$1.1 billion and employs over 4,500 people in Brazil. Besides, Brazil is WPP’s eighth largest market.

Earlier, the company’s digital arm had acquired a minority stake in technology solutions provider nPario Inc. for US$5 million.

nPario solutions and applications analyze large volumes of data for marketing. The customers of nPario include Microsoft (MSFT), Yahoo (YHOO), Adobe (ADBE), Oracle (ORCL) and SAS.

Both the companies entered into a strategic partnership, enabling integration of online and offline data of WPP into the nPario platform. Consequently, they will aid marketers in improving audience insight.

Based in Dublin, Ireland, WPP together with its subsidiaries provides advertising and communications services worldwide. The Group faces competition from its peers like Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC), and Publicis Groupe SA.

We believe that WPP Plc continues to focus on new and fast developing markets, new media and consumer insights. Further, the company’s pricing power helps in improving margins and sustaining future profit growth.

We currently have an Outperform recommendation on WPP plc, supported by Zacks #2 Rank (short-term Buy).

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