Marketing giant WPP has sold its stake in public relations firm FGS Global for £611 million.
Private equity business KKR has acquired WPP’s 50% stake in the company in a deal which values FGS at £1.3 billion.
KKR had already acquired a minority interest in the business in July last year, and made an approach to WPP earlier this year to acquire its stake which was initially rejected. The new deal brings its shareholding in FGS up to 80%, with the remainder owned by partners and senior managers of the firm.
Mark Read, CEO of WPP, said the company has “achieved an attractive price, enabling WPP to accelerate the crystallisation of the significant value created. This also provides WPP with greater financial and management flexibility.”
WPP shares fell 2% to 700p following the announcement.The transaction is set to conclude before the end of the year.
FGS rival Teneo was acquired by private equity firm CVC in 2019, a deal which has proved challenging for the business after two of its founders subsequently departed amid a series of scandals.
FGS Global was founded as RLM Finsbury by former Financial Times journalist Roland Rudd, brother of former Home Secretary Amber Rudd, who is thought to have pocketed around £40 million after selling the business to WPP in 2001.
In a series of tie-ups in 2021, Finsbury merged with rivals The Glover Park Group, Hering Schuppener and Sard Verbinnen and rebranded to FGS Global, building a multinational network of over 1,000 staff in the process with offices from London to Hong Kong and Abu Dhabi.
WPP was thought to have been laying the groundwork for a public flotation of FGS as soon as this year. In 2023, FGS generated £374 million with operating profits of £70 million.
WPP today reported flatlining revenues, up 0.1% for the first half of the year to £7.2 billion, with pre-tax profits down 3.8% to £525 million.
