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| Mark Read |
WPP CEO Mark Read sells a 50.1 percent stake in FGS Global, which generated $465M in 2023 revenues, to KKR for $775M as his firm's Q2 sales dip 0.5 percent.
The transaction values the financial communications and business advisory powerhouse at $1.7B.
Read said WPP received an attractive price, enabling it to “accelerate the crystallization of the significant value created.”
His firm now has greater financial and management flexibility to grow its core businesses including Burson and Ogilvy Public Relations.
Headquartered in New York, FGS has more than 25 offices worldwide and 1,400 staffers. It generated $90M in headline EBITDA last year.
Alexander Geiser, CEO of FGS, said KKR shares his firm’s “vision and strategy to be the leading advisor helping clients navigate the increasingly complex stakeholder economy.”
He said “KKR’s exceptional investment track record, extensive experience and global resources will be invaluable as we further grow our integrated solutions globally as a standalone firm.”
KKR will now own about 80 percent of FGS. The PR firm’s management and partners will hold the remaining shares.
WPP's 2Q revenue drop was due to pressure in the China market and project-related work along with uncertainties in the macro environment.
Read noted “sequential improvement” in its Burson PR unit as it struggled to overcome the 2023 loss of a Pfizer assignment, reduced client spending and a hazy political scene.
“Corey [duBrowa] and the team at Burson have done a fantastic job on launching the new agency,” he told O’Dwyers. “You can see it has momentum in the market which is going to build and deliver financial success.”
The PR group posted $722M in 1H revenues, which was down 2.7 percent on a reported basis and 0.9 percent on a like-for-like measure. Operating profit fell 9.1 percent to $102M.
Looking ahead for the remainder of the year, Read now expects to report a one percent drop or flat revenues. He had forecasted one percent growth or flat sales.
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