LONDON; WPP plc (LSE/NYSE: WPP) has entered into an agreement to sell its entire majority stake in leading strategic communications and advisory firm, FGS Global, to Kite Bidco Inc., an entity controlled by investment funds managed or advised by Kohlberg Kravis Roberts & Co. L.P. (“KKR”).

KKR first made a minority investment in the firm in July 2023.

The transaction accelerates the value realisation for WPP from its strategic advisory businesses.  This strategy started with the merger of Finsbury, The Glover Park Group and Hering Schuppener in 2021, the subsequent acquisition of Sard Verbinnen in 2021 and the introduction of KKR as a minority shareholder in 2023.

Through these transactions, FGS Global has become a global leader in providing advice to the stakeholder economy with over 1,400 experts and over 1,600 clients.

The consideration for the sale of WPP’s c.50% stake at an Enterprise Value of $1.7bn is $775m (£611m) payable in cash at completion.

This represents an attractive valuation multiple to the 2023 EBITDA.

The total cash proceeds will be used to reduce WPP’s leverage, implying pro-forma average net debt to EBITDA of c.1.60×4.

Mark Read, CEO of WPP, said: “The sale of FGS represents an excellent outcome for WPP. Together with the management of FGS we have built a world-leading strategic communications and advisory group, creating considerable value for all stakeholders.

We have achieved an attractive price, enabling WPP to accelerate the crystallisation of the significant value created. This also provides WPP with greater financial and management flexibility as we continue to grow our core business including Burson and Ogilvy Public Relations which give our clients access to world-class public relations services.”

Philipp Freise, Partner and Co-Head of European Private Equity at KKR, stated: “Our investment in FGS reflects our strong commitment to strategic partnerships, where we provide long-term capital and global resources to entrepreneurial teams and world-class businesses.

We strongly believe in FGS’s strategy and leadership and have been pleased with our partnership since our minority investment in July 2023. In today’s increasingly complex stakeholder ecosystems, the value of FGS’s insight, advice and execution is increasingly essential for organizations to navigate uncertainty and achieve their goals.

We look forward to continuing our collaboration and helping FGS realize their vision as a global category leader.”