Why WPP Acquires Digital Agency AKQA?

Perfectly timed in the middle of the Cannes festival, WPP announced the acquisition of digital and social agency AKQA.

Read the details and about the why…

AKQA was among the last big digital shops not yet public or owned by a holding company.

And it might be a strategic very clever buy by WPP, since AKQA is not only digitally skilled, it also creates social by design brands. And social is hot at many leading brands.

In 2010, AKQA was almost acquired by Japanese agency network Dentsu. However, Dentsu ended the talks because their offer of around $550 million was declined by AKQA.

WPP CEO Martin Sorrell stated about the acquisition of AKQA: “this is the third time knocking, call us third time lucky”.

AKQA CEO Tom Bedecarre stated that WPP offers further international expansion. “The plan is to leverage partnerships with the rest of the company and we’ll be up with the big boys at the WPP table and its media agencies.”

Purchase price was not disclosed; however, AKQA’s enterprise value is $540 million and it’s believed that the price hovered around that.

WPP said it may shed more light in that regard on its analyst call. The acquisition is subject to regulatory approval.

AKQA employs 1,160 people worldwide with offices across the US, Europe and Shanghai and will exist as a stand-alone brand within WPP, the largest ad holding company.

Founder-CEO Ajaz Ahmed and Chairman Tom Bedecarre will stay on, with Mr. Bedecarre also becoming president of WPP Ventures tasked with identifying digital investment opportunities.

It’s clear that WPP wants to grow in the digital and social space. And AKQA could be the right partner, looking at its client portfolio and skills.

Source: AdAge