WPP Acquires 20% of Globant, Will Invest US$70 Million

WPP, one of the world’s leading communication and publicity groups, has acquired 20% of Globant. An Argentine company, Globant is dedicated to the creation of innovative software products based on emerging trends and technologies.

In 2011, Globant’s revenues reached US$90 million, and through June 2012, the company brought in US$56.9 million, with active shares valued at US$69 million on June 30, 2012.

WPP will invest approximately US$70 million in Globant, while Riverwood Capital and FTV Capital, previous investors, will hold their positions as shareholders.

This investment comes as part of WPP’s strategy of focusing on fast-growing sectors and markets and of applying technology to communications services industries.

In 2012, WPP completed 25 transactions with companies in fast-growing markets (for example, BRICs, Next 11, CIVETS, MIST) and in sectors undergoing significant expansion – digital, data and technology applications.

It is important to point out that the earnings of WPP digital (including partner companies) will surpass US$6 billion in 2013, which would represent 33% of the group’s total earnings – a sum that reached US$16 billion in 2011. Within the next five years, WPP hopes to derive 35-40% of its revenues from digital services.

Likewise, the transaction is supported by the needs of many clients in coordinating their IT and Marketing departments, given that much of the market is tied to agencies large and small that specialize in one area or the other, lacking an offer the consolidates both dimensions.

The Era of Latin America

What’s more, this transaction is in line with WPP’s strategy of investing in rapidly-growing geographic markets, which currently make up a third of its income and which it hopes will reach between 35% and 40% within the next five years. The company will also seek to develop its strategic network throughout Latin America.

According to WPP, this will be the decade of Latin America. This conjecture has been made especially in consideration of the 2014 World Cup and 2016 Olympic Games in Brazil. In total, and including associate entities, the group will bring in more than US$1.6 billion and employ more than 18,000 people in Latin America alone.

Highlights of Globant’s Nine-Year Life:

-A network of over 2,700 professionals who work for companies like Electronic Arts, JWT, LinkedIn, Sabre and Coca Cola.

-Founders selected as Endeavor Entrepreneurs (2005).

-Company chosen as one of the top 10 product engineering providers in the world by Global Services (2011).

-Globant named in Gartner’s Cool Vendors in Business Process Services report (2010).

-Company among the top 10 mobile app developers in an IDC poll of users and businesses (2012).

This text has been adapted into English by Emily Stewart from its original Spanish publication.

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