WPP Group buys stake in Just Marketing
The international marketing company WPP Group has acquired a stake in Just Marketing International.
The deal, which is expected to be announced today, values Just Marketing International at $100 million. WPP will join existing shareholders Spire Capital Partners, Credit Suisse and Zak Brown, who founded the agency. Its investment is believed to give it a stake of roughly 25 percent in the agency.
“This is a huge compliment,” said Brown, 40, who will remain CEO of JMI. “For [WPP Chief Executive Martin Sorrell] to say, ‘I think motorsports is a great place to invest’ is a great sign for the industry.”
Since then, JMI has diversified its business by expanding its operations overseas. Based in Indianapolis, it now has offices in Singapore and London, and about 60 percent of its revenue now comes from international markets. Its client list includes Castrol, LG Electronics, Singapore Exchange, Subway and UBS, which last year cut a $200 million, five-year Formula One deal.
Brown believes WPP’s investment will help JMI grow by providing it with access to the company’s corporate client base and supporting it with the expertise of subsidiaries specializing in areas such as digital media.
“There’s no doubt it will operationally benefit us,” Brown said. “Whether it’s efficiencies or buying power, I’m sure we’re going to gain and learn a lot.”
WPP has more than 2,400 offices in 107 countries and employs more than 146,000 people across the areas of public relations, branding, communications and direct, digital and promotional marketing. It has acquired a number of agencies in the last year, including Blue State Digital, the group behind Barack Obama’s presidential campaign, a Turkish public relations firm and an Asian digital agency.
The company has several subsidiaries that work in sports, including GroupM ESP, Wunderman and Prism, a United Kingdom-based sports marketing agency. Brown said it’s possible JMI could do work with those agencies but more likely that it works with complementary specialties such as a media buying agency like Mindshare or public relations agency like Hill & Knowlton.
Brown got to know Sorrell through Formula One. Sorrell is a non-executive director of the motorsports series, and Brown played a central role in bringing UBS into the series as a global partner. The two began talking several years ago about the possibility of a deal, and WPP’s mergers and acquisitions group began formal negotiations this year.
“We are strong believers in the marketing power of international motorsports for global brands,” said Andrew Scott, WPP’s director of corporate development, in a statement. “JMI is a leading company in the sector so this investment is a natural fit for WPP and will help to offer our clients exciting new opportunities in the field of motorsports.”
Brown said that JMI will remain focused on motorsports and continue to increase its revenue internationally. Though JMI has the resources to acquire other agencies, he doesn’t envision it doing so in the near future. However, it occasionally will expand beyond motorsports by doing hospitality and marketing campaigns for existing clients who want help in other sports and entertainment sectors. It began doing that last year when it managed DirecTV’s experiential marketing promotion around “Monday Night Football.”
“There are a lot of areas for growth and that will be one we will look at on an opportunistic, client-driven basis,” Brown said. “Where we’ll have the most growth is being able to offer larger, deeper services in sports by stepping up our digital game, our advertising game and other supplementary opportunities.”