WPP buys stake in $700m digital media player Essence

WPP's GroupM, the world's leading global media investment group, announces plans for the addition of Essence Digital Limited ("Essence"), the global agency that is the world's largest independent buyer of digital media, to its portfolio in concert with WPP's acquisition of a majority stake in the company.

Observers say the move makes sense for both sides and, from WPP's point of view, snapping up Essence appears to strengthen its relationship with Google. Following the deal, whose precise terms have not been disclosed, Essence will become part of WPP's media investment arm GroupM.

"WPP tends to have a very disciplined approach to valuation, which means it doesn't often win in competitive processes for stand-out, high-growth businesses".

Essence will continue as a separate brand in WPP's GroupM media monolith (GroupM is, presumably, the world's biggest non-independent buyer of digital media).

WPP's digital revenues were $6.9 billion in 2014, representing 36 per cent of a total revenue of $19bn. "[Essence] is reported to be Google's main global digital agency-one can imagine there was a lot of interest in the business", says Julie Langley, a partner in M&A firm Results global.

Founded in 2005, Essence manages media spend of over $700m (£450m) from its base in the UK and offices in York, San Francisco, Seattle, Singapore and Tokyo, having been on its own acquisitive spree in recent years as it looked to improve its access to social media and mobile.