WPP continues to offload businesses following the strategy it announced in December 2018 to focus on its main areas of business and simplify its operations by disposing of non-core assets. WPP has so far made just under £1bn (AU$1.8bn) of disposals under Mark Read. Its debt stood at approximately £4bn (AU$7.3bn) at the end of last year.
WPP has sold its minority shareholding in Chime, which owns VCCP and CSM Sport & Entertainment. The holding company’s 24.85% stake in the company is being purchased by Providence Equity for £54.4m (AU$98.7m). In its statement to the London Stock Exchange, WPP said that it will also receive “potential additional amounts based on the future value of Chime”.
Providence and WPP paid £374m (AU$678.6m) for the business four years ago in 2015. WPP had already owned an 18% stake in Chime before the deal. Chime acquired VCCP in 2005 and its revenue grew by 14% in 2017 to £279.9m (AU$507.9m) although its pre-tax profit of £21.6m (AU$39.2m) was down by 1.4% year-on-year.
Last week, WPP sold its 75% stake in Britain’s largest post production company, The Farm, to US rival, Picture Shop. WPP has owned a majority stake in The Farm for more than 20 years, during which time the company has been involved in the production of hit series including Downton Abbey, Gentleman Jack, and Made in Chelsea, and operates the in-house post-production teams for BBC Sport. The Farm is estimated to be worth £50m (AU$90.7m)
WPP is also trying to sell a majority stake in research business, Kantar. A few hours ago, Bain Capital became the latest private equity firm to enter into discussions to buy WPP’s stake, which would value the business at about £4bn (AU$7.3bn).