Stagwell (STGW) Expands in Latin America with Acquisition of PROS Agency, Digital PR Leader in Brazil

Rhea-AI Summary

Stagwell (STGW) acquires PROS Agency, a Brazil-based digital PR leader, to expand its presence in Brazil and Latin America. PROS grew 50% in 2023 and will enhance Stagwell's business in the region. The acquisition aims to drive global expansion and strengthen Allison's brand.

Insights

Market Research Analyst

The acquisition of PROS Agency by Stagwell evidences a strategic move to amplify its footprint in the burgeoning Latin American market. Market penetration in LATAM is a significant aspect for multinational agencies, given the region's increasing digital consumption and a growing middle class. The 50% growth rate of PROS Agency in 2023 indicates a robust client portfolio and the potential for scalability. This growth narrative is essential for Stagwell's investors as it signals potential revenue enhancements and a stronger competitive positioning in this geography.

Furthermore, the digital PR expertise of PROS aligns with the global trend towards digital transformation in marketing services. This could lead to diversified service offerings and enhanced client retention for Stagwell. The acquisition is also a reflection of the industry's consolidation trend, where established networks are expanding capabilities and client bases through strategic purchases. This could have a cascading effect, leading to additional M&A opportunities in the region, which is something for stakeholders to watch closely.

Financial Analyst

Stagwell's move to acquire PROS should be analyzed from a financial perspective, focusing on the costs of cross-border acquisitions, potential synergies and how it might affect earnings per share (EPS). Considering PROS' 50% growth last year, we might expect a positive impact on Stagwell's earnings, provided the acquisition cost is justified. However, investors should look for transparency in the acquisition terms, long-term financial commitments and how this expansion aligns with Stagwell's overall profitability goals.

Investors should also be mindful of the integration risks associated with M&A activities. Effective incorporation of PROS into Stagwell's existing structure is essential to realize the anticipated value and to avoid potential cultural clashes or operational inefficiencies that can erode acquisition benefits. A keen eye on subsequent quarterly reports will be necessary to evaluate the ROI of this strategic decision.

Female-Founded Agency Grew 50% in 2023 and Will Scale Stagwell's Presence in Brazil and Latin America as Part of Allison

SÃO PAULO, April 15, 2024 /PRNewswire/ -- Stagwell (NASDAQ: STGW), the challenger network built to transform marketing, has entered into an agreement to acquire PROS Agency (PROS), a Brazil-based brand and marketing consultancy specializing in digital public relations (PR), creative planning and production, influencer marketing, and brand development. Headquartered in São Paulo, the agency will play a key role in driving business for Stagwell within Brazil as well as the greater Latin America (LATAM) region as part of Allison, a global marketing and communications consultancy within Stagwell.  

The agency will play a key role in driving business for Stagwell within Brazil as well as the greater LATAM region.

"PROS' creative strategy and digital innovation expertise helps brands create engaging and purposeful conversations with consumers, consistently pushing the boundaries of PR – making them a true leader in the region," said Stagwell Chairman and CEO Mark Penn. "I worked in Latin America for several years and have always noted its massive growth potential. This acquisition is key to our accelerated global expansion strategy, and I'm pleased to welcome Daniela and her team to our network." 

"Since launching our operations in Brazil and Latin America two years ago we've driven significant results for regional brands, landed new global clients such as Lenovo and Motorola, and expanded our footprint with the additions of new agency partners to our Global Affiliate network," said Vinicius Reis, president, Stagwell Brazil and CEO, Crispin Porter and Bogusky (CP+B) Brazil. "In less than 10 years PROS' 'People Relations' approach to creative and digital storytelling has earned the agency widespread recognition and work with the most important brands in the region. Their addition to our network further strengthens Allison's brand and positions us for significant growth in Brazil and LATAM."  

PROS employs a contemporary perspective to PR by connecting data and cultural context to execute in various formats. The team of over 130 professionals is co-led by founder and CEO Daniela Graicar and co-CEO Fernanda Tchernobilsky, as well as partner Alan Strozenberg. They will continue to lead the agency. 

"It's a great accomplishment to be part of an international network so aligned with our values and in retaining the boldness that defines us. The management autonomy that Stagwell offers us and the support for our growth were also decisive factors in this choice," said Daniela Graicar, founder and CEO, PROS. "More than ever, we are committed to our team and clients – who have gotten us to this point – and excited about the plans for our evolution in the coming years. The depth and breadth of the Allison global network opens up tremendous opportunity for us to show up in new ways for our clients." 

With clients such as Boticário, Amazon, Mondelez, Vibra, Porto, and Kimberly Clark, the agency closed 2023 with 50% growth and expects to grow another 20% this year.  

PROS will retain its leadership and will collaborate with other Brazil and Latin America agencies in the Stagwell network to expand service offerings to clients. Stagwell's agency network in Brazil, Argentina, Mexico, and Central America includes Allison, Assembly, Code and Theory's Truelogic, CP+B, Ink, and Locaria.  

PROS marks Stagwell's fourth acquisition in 2024, following What's Next Partners, Sidekick, and Team Epiphany.  

About Stagwell 
Stagwell (NASDAQ: STGW) is the network created to transform marketing. We deliver creative performance at scale for the world's most ambitious brands, connecting culture-moving creativity with cutting-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our more than 13,000 experts in more than 34 countries are united under a single purpose: to generate effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.  

About Allison 
Allison is a global integrated marketing and communications consultancy dedicated to driving growth, innovation, and positive change for clients, colleagues, and communities. With a diverse range of expertise and a forward-looking mindset, Allison delivers game-changing results that make a lasting impact. Allison is owned by Stagwell (NASDAQ: STGW), one of the fastest growing and most influential marketing and communications networks in the world. Agency partners leverage Stagwell's technology, data analytics, insights and strategic consulting solutions to drive measurable results and optimize return on marketing investment for more than 1,700 clients worldwide. Learn more at www.allisonworldwide.com.  

Media Contact
For U.S.
Sarah Arvizo 
pr@stagwellglobal.com 

For Brazil: 
Laize Lima 
lmlima@cpbgroup.com 

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SOURCE Stagwell Inc.

FAQ

What is the significance of Stagwell acquiring PROS Agency?

Stagwell's acquisition of PROS Agency aims to expand its presence in Brazil and Latin America, leveraging PROS' expertise in digital PR and creative planning.

How much did PROS Agency grow in 2023?

PROS Agency grew by 50% in 2023, showcasing significant growth and success in the region.

Who will lead PROS Agency after the acquisition?

PROS Agency will continue to be led by founder and CEO Daniela Graicar, co-CEO Fernanda Tchernobilsky, and partner Alan Strozenberg.

What services does PROS Agency specialize in?

PROS Agency specializes in digital public relations, creative planning and production, influencer marketing, and brand development.

What is the role of PROS Agency within Stagwell and Allison?

PROS Agency will play a key role in driving business for Stagwell within Brazil and Latin America as part of Allison, a global marketing and communications consultancy within Stagwell.