WPP (WPP.US) sold FGS Global to KKR for $775m, lowering its full-year organic revenue guidance

WPP, the world's largest advertising group, agreed to sell its controlling stake in financial PR firm FGS Global to minority shareholder KKR for $775m in cash, which it will use to reduce its debt, the company said on Wednesday. WPP said it was selling about 50% of FGS Global, which is valued at $1.7bn on a pro forma basis, equivalent to 18.9 times FGS Global's core earnings in 2023.

“It's a great outcome,” said WPP chief executive Mark Read, who three years ago merged Finsbury, the Glover Park Group and Hering Schuppener into FGS Global. “It allows us to strengthen our balance sheet and focus on our core innovation-led transformation proposals.”

WPP also announced its first-half results on Wednesday, showing a further slide in organic growth and lowering its full-year outlook. Revenue, excluding transfer pricing, fell 1 per cent in the first half, in line with analysts' expectations. The company said it now expects organic growth to be between -1 per cent and flat, down from its previous forecast of 0-1 per cent.

By region, the company's second-quarter revenues fell by 5.3 per cent in the UK and 24.2 per cent in China. Ebitda before exceptional items was £338m, above analysts' expectations of £319m.