Advertising titan, WPP plc’s (WPPGY) wholly-owned subsidiary, WPP Digital has recently agreed to acquire United States based digital marketing agency, Rockfish Interactive Corp. The completion of the transaction is subject to both regulatory and Rockfish shareholders’ approval.
Rockfish specializes in providing strategic consulting, technology, mobile, design and digital marketing services to its clients. The agency, founded in 2006 in Rogers, AR,employs over 150 people and has offices in Little Rock, AR, Dallas and Cincinnati.
The acquisition supports WPP Group’s efforts in expanding its operations in the fast growing emerging markets and will enable the company to gain access to Rockfish’s key clients including Walmart, Sam’s Club, Cisco, Procter & Gamble, United Health, EA Sports and Tyson Foods.
WPP, one of the largest advertising companies in the world, is a significant player in the US. In our opinion, the company is very well placed and can benefit from a 1%-2% growth in the advertisement industry in 2012. Moreover, investments in digital tools and infrastructure will help create value for WPP’s clients.
The company is slated to release its interim half yearly results on August 24. The current EPS Zacks Consensus Estimate for the second quarter of fiscal 2011 is $1.58, which represents a year-over-year growth of 1336.4%. Estimates for the fiscal years 2011 & 2012 are $5.16 and $5.64, reflecting an annual growth of 38.08% and 9.21%, respectively.
The company faces competition from its peers like Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC), and Publicis Groupe SA (PUBGY.PK). We currently maintain an Outperform recommendation on the stock.
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WPP GRP PLC (WPPGY): Free Stock Analysis Report
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