LONDON (Reuters) -British ad group WPP on Wednesday agreed to sell its controlling stake in financial PR agency FGS Global to minority shareholder KKR for $775 million in cash, which it will use to reduce debt.
WPP, the owner of agencies Ogilvy and GroupM, announced the sale alongside first-half results that showed another drop in organic growth, and a downgrade in its expectations for the full year.
The sale of its around 50% stake values FGS Global at $1.7 billion on an enterprise basis, WPP said, implying a multiple of 18.9 times 2023 core earnings.
WPP Chief Executive Mark Read said the deal was an "excellent outcome" three years after it merged its Finsbury, The Glover Park Group and Hering Schuppener to create FGS Global.
"It allows us to strengthen our balance sheet and focus on our core create transformation offer," he said in an interview.
For the first half of the year, revenue less pass-through costs fell 1%, in line with analysts expectations, with large drops in the second quarter in Britain, down 5.3%, and in China, down 24.2%.
For the full year, WPP said it expected organic growth to be between -1% and zero, a downgrade on its previous 0% to 1% forecast.
(Reporting by Paul Sandle; Editing by Alistair Smout and Sarah Young)
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