WPP to buy 24/7 Real Media for $649 million

U.K. advertising giant wins company said to be stalked by Microsoft
By Steve Goldstein, MarketWatch
Last Update: 8:48 AM ET May 17, 2007
LONDON (MarketWatch) -- British advertising giant WPP Group said Thursday it's buying 24/7 Real Media for $649 million, beating Microsoft to acquiring the Internet advertising firm.
WPP (WPPGY :

Last: 75.03+0.64+0.85%9:08am 05/17/2007Delayed quote data
WPPGY75.03, +0.64, +0.9%) (UK:WPP: news, chart, profile) said it's paying $11.75 a share for 24/7 Real Media (TFSM :
24/7 real media inc com new
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Last: 11.26+0.25+2.27%9:08am 05/17/2007Delayed quote data

TFSM11.26, +0.25, +2.3%) , a 4% premium to the New York-based company's closing price on Wednesday.
24/7 shares have gained nearly 45% over the last two months on buyout hopes, with Microsoft
The deal price equates to $637 million in cash, with a net $12 million more for unvested stock and options minus 24/7's cash at hand.
Shares of 24/7 rose 3.5% to $11.65 in pre-open trading. WPP's London-listed shares rose 1.5%.
WPP said online advertising will exceed $33 billion in 2007, or more than 8% of global advertising spend. 24/7's search business provides clients with advice on search engine optimization and management for Google

"The TFSM team has long experience in the industry and has developed one of the most sophisticated and robust Internet technology platforms, that has enabled the business to deliver strong revenue growth, particularly in 2005 and 2006," WPP said in a statement.
WPP said the deal will hurt earnings in 2007 and 2008 by about 1%. It identified $5 million in cost savings.
Longer term, WPP said the acquisition will help comparable revenue and earnings growth. WPP held to its margin target goal of 15.5% in 2008 and 16% in 2009.
Top 24/7 management, including Chairman and CEO David Moore and CFO Jonathan Hsu, will continue in their current roles.