WPP is preparing a bid for retail data giant Dunnhumby, according to reports. Troubled current owner Tesco is said to be considering the sale of the Clubcard operator, valued by analysts at up to £2bn. Separately, WPP has invested $250m in new sports marketing firm Bruin.
Three months ago, Sky News reported that venture capital firm TPG had approached Tesco with a bid for Dunnhumby, around the £2bn value, and had it rejected, but a number of other potential buyers are said to have expressed interest then, and reports suggest that a WPP offer may be imminent.
Dunnhumby, which now employs more than 2,000 people in 30 countries, was founded in 1989 by husband and wife team Edwina Dunn and Clive Humby, and developed the vastly successful Tesco Clubcard scheme, allowing innovative analysis of shopper behaviour: it’s estimated that the firm has helped save Tesco around £350m a year since 1995. That kind of figure could be useful to Tesco, which is currently under investigation by the UK’s Financial Conduct Authority and Financial Reporting Council after apparently overestimating its first half profit by £250m: however some observers think the supermarket giant would gain from selling Dunnhumby and returning to buying in its services. The data firm works for a catalogue of other major retailers and brand owners including P&G, Coca-Cola, Diageo, GlaxoSmithKline and Mondelez International.
WPP, which a month ago announced a $1.25bn deal with IBM expanding its use of big data and analytics and developing new cloud-based digital services, has also this week announced it is leading a $US 250m investment round in Bruin Sports Capital, a global sports marketing firm launched by former IMG Worldwide exec and former NASCAR COO George Pyne. The deal gives WPP a preferred partnership arrangement with Bruin giving its clients access to unique media and sponsorship opportunities in sport.
Diverging from WPP’s usual boilerplate statement on acquisition and investment strategy, CEO Sir Martin Sorrell enthused about the latest buy, saying: ‘WPP’s investment in sports and sports content through Bruin Sports Capital is an important part of its strategy, as it impacts new markets, new media, data investment management and the application of technology and horizontality. George is a major talent in the sports business world and based on his track record, I’m confident that the clients who work with WPP’s operating companies will be given access to many high-value media and sponsorship opportunities. GroupM, our wholly owned media investment management company, manages over US$100 billion in billings (according to RECMA) and there is growing interest on the part of clients to invest some of that portfolio in content and sport.’
WPP’s extensive existing investments in global sport include deals with retired Brazilian football legends Pele and Ronaldo.