WPP is sticking to its ecommerce strategy, buying Netherland’s based 155-stromg ecommerce consultancy Newcraft, despite its share price (along with most of its peers) languishing, valuing the once £16bn marcoms business at just over £8bn. Some analysts give the company an enterprise value – a measure of overall financial worth – of £13bn.
Newcraft’s global clients include Ahold Delhaize, Pon Holdings, Yakult and JDE Peet’s. It will be rolled into WPP’s Wunderman Thompson ecommerce offering. WPP claims to manage $40bn of direct and $20bn of marketplace sales for such clients and employs 13,500 commerce specialists across its agencies.
WPP CEO Mark Read says: “With consumer behaviours and use of new ecommerce channels continuing to change at a rapid pace, brands need innovative solutions to reach customers and new audiences. As we continue to invest in growth areas, Newcraft’s extensive experience of transforming the digital offering of some of Europe’s leading companies will further strengthen our global commerce proposition and drive results for clients.”
Newcraft director and founder Martijn Haanappel says: “We are very excited to start this new chapter. When we look back at the past 15 years, we’re extremely proud of the strong company we’ve created: we’ve built very talented teams; a dynamic and open culture; and an impressive track record with our clients.
“By joining WPP and the Wunderman Thompson network we have found the perfect match to start the next phase of our growth ambition. Combining our digital acceleration capabilities with Wunderman Thompson’s market-leading commerce expertise will undoubtedly lead to amazing opportunities for both our people and clients.”
Bolt-on acquisitions in growth areas are undoubtedly a sensible strategy for WPP but Read and his team must be frustrated by the languishing share price which makes WPP vulnerable to an opportunistic bid.