The world’s largest advertising agency has been making so many digital acquisitions over the last two years that barely a day goes by without another deal announcement. But WPP’s latest sees the outfit making an even bigger digital stride…
It is buying the specialist and well-regarded 11-year-old digital communication agency AKQA, which has 1,160 employees worldwide and forecasts 2012 revenue of $230 million.
That’s not all. Although Martin Sorrell-led WPP will be retaining AKQA as a standalone brand in the group, it is also using it to form WPP Ventures.
That unit will be “a new Silicon Valley-based company, which will explore new digital investment opportunities for WPP as a whole”, according to the company.
AKQA chairman Tom Bedecarré will be president of the new group AKQA co-founder Ajaz Ahmed says (via release):
“With increased resources and access to new geographies, our partnership with WPP will fuel the next level of energy, excitement and opportunity, delivering innovation and creativity at scale.”
The AKQA acquisition price is around the enterprise value of $540 million (£348 million) which WPP ascribes to the outfit in a slide deck to explain the deal to its investors.
General Atlantic and other shareholders own 80 percent of AKQA, with 20 percent held by employees.
So hard is WPP buying in to digital agencies now, it says total 2012 spending will now exceed its original estimate of £400 million spending on new acquisitions.