(By Balachander) WPP Plc (NASDAQ: WPPGY), a communications services company, said it will acquire a 20 percent stake in Buenos Aires-based Globant S.A. for roughly $70 million.
Globant provides clients with infrastructure and technical support that drive digital marketing campaigns. Its net revenue was US$90 million for the year ended December 2011.
Globant's clients include American Express (AXP), JP Morgan Chase & Co. (JPM), LinkedIn (LNKD), Electronic Arts (EA), Google (GOOG), Coca-Cola (KO), National Geographic, Zynga (ZNGA) and Sabre Holdings, as well as a number of WPP companies, such as JWT, Young & Rubicam, Grey, GroupM and Kantar.
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Ireland-based WPP said the latest investment continues its strategy of targeting fast-growing markets and sectors and the application of technology to the communications services industry.
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As of June 30, 2012, Globant has total assets of US$69 million.
"Partnering with Globant will allow our companies to increasingly provide our clients with insights and skills that will make their digital marketing efforts even more effective and simpler to manage at both the front and back ends," commented WPP Chief Executive Sir Martin Sorrell.
In 2012, WPP said it has completed 25 transactions with companies that are in either faster growing markets (e.g. BRICs, Next 11, CIVETS, MIST) or faster growing sectors such as digital, data or application of technology, or both.
WPP said its digital revenues are budgeted to total well over US$6 billion in 2013, representing over 33 percent of the its total revenue, which totalled US$16 billion in 2011. WPP has set a target of 35 percent - 40 percent of revenues to be derived from digital over the next five years.
U.S.-listed shares of WPP traded 2.72 percent higher at $74.88 on Wednesday.