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WPP Plc to Buy Bottle Rocket

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Advertising and marketing services major WPP plc , recently announced the signing of a deal to acquire Bottle Rocket, a full-service mobile solution provider in the US. The financial terms of the deal as well as the purchase consideration have not been disclosed.

Headquartered in Dallas, Texas, Bottle Rocket designs iPhone, iPad and Android apps for renowned brands. Established in 2008, the company has served brands such as NPR, Scripps Networks Interactive, Inc. , ABC News, National Geographic and NBC Universal. The company generated revenues worth $17 million for the twelve months-ended September 2013 and many of its apps lead in their categories in the App store.

This acquisition by WPP plc is a strategic move to strengthen its competency in digital media and mobile advertising.  In August, WPP plc’s digital investment arm – WPP Digital – purchased a minority stake in Mutual Mobile, Inc., an Austin-based mobile product development agency, to expand its digital business.

WPP offers a range of advertising and marketing services including advertising and media investment management; consumer insight; public relations and public affairs; direct and digital promotion as well as relationship marketing. WPP plc operates under four segments, namely, Branding and Identity, Healthcare and Specialist Communications; Advertising and Media Investment Management; Data Investment Management; and Public Relations & Public Affairs.

The company’s digital business falls under the Branding and Identity, Healthcare and Specialist Communications segment. The segment delivered a strong performance in the third quarter of 2013, with revenues of £747 million ($1,157.4 million), rising 10.1% year over year.

The digital business alone generates substantial revenues for WPP plc. Of the total revenue generated in 2012, the digital arm accounted for 33% or $5 billion. Additionally, WPP plc is planning to increase contribution of revenues from fast-growing markets and new media to 40-45% of total revenue.

WPP currently carries a Zacks Rank #2 (Buy). Some other advertising stocks worth considering, carrying the same rank are Clear Channel Outdoor Holdings Inc. (CCO - Free Report) and Publicis Groupe SA (PUBGY - Free Report) .

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