WPP CEO Sir Martin Sorrell has scrapped his self-imposed £100m a year spending limit on acquisitions in the wake of reporting (mildy) better than expected growth in the first quarter of 2011 and a reduction in WPP’s debt from £3.1bn to £2.6bn.
Which is just as well really as he’s already spent about £100m acquiring Germany’s Commarco, the owner of Scholz and Friends among other agencies.
Sorrell now says the company will spend ‘about’ £200m this year on further acquisitions, eyeing companies in Asia and Latin America where the fastest worldwide ad growth is coming from.
He will have certainly been rattled by the recent spate of acquisitions at Publicis Groupe, the third-largest marcoms company behind leader WPP and Omnicom.
Publicis has been on a frenetic buying spree, snapping up Tailor Made, GP7 and 60 per cent of Talent in Brazil and Chemistry and Kitcatt Nohr in London in just the past few weeks. Publicis is also growing its revenues at 10.7 per cent, faster than all its rivals.
In a number of interviews in India recently Sorrell decried reports of Maurice Levy’s Publicis expanding more rapidly than the field as “French propaganda.” But his deal to buy Commarco (for an officially undisclosed sum but the company has assets of over €100m) was both a surprise in that Germany is clearly not an emerging economy, although it’s a strongly performing one, and concluded very rapidly.
So WPP is well and truly back on the acquisition trail and few executives wield a cheque book with more vigour than Sir Martin.