Chinese marketing company buys We Are Social

BlueFocus Communication Group, the Chinese marketing services firm, has bought the majority of We Are Social, the social and digital agency, for an initial £18.7 million.

Robin Grant and Nathan McDonald: We Are Social founders
Robin Grant and Nathan McDonald: We Are Social founders

The agency was majority owned by its founders Robin Grant and Nathan McDonald. BlueFocus has bought 82.8 per cent of the business for an initial £18.7 million, with further performance-based amounts payable over a three-year period.

We Are Social works with brands including Adidas, Heinz, Kimberly-Clark, Mondelez, Heineken, eBay, Jaguar, Intel and Moët & Chandon. Global revenue in the year to 30 June 2013 was £23 million and the company has forecast revenue of £35 million in the year to 30 June 2014.

Grant and McDonald founded the agency in 2008 in response to the impact of social media on marketing and media. The agency employs 400 people across offices in New York, London, Paris, Milan, Munich, Singapore, Sydney and ‎São Paulo.

Grant, the co-founder and global managing director, We Are Social, said: "The partnership will allow us to continue investing in our brand and our culture, deliver increased scale and better infrastructure to our clients, and accelerate our mission to put social thinking at the centre of marketing.

"China is also central to both our and our clients’ plans for future growth, and the alliance with BlueFocus will give our clients unparalleled insight into this important fast-growing economy."

The deal values We Are Social at an enterprise value of £25 million today, which is an eight times multiple of underlying profits of £3.1 million in the year to 30 June 2013. However, the final price will depend on the agency's performance over the next three years and should be much higher.

BlueFocus is listed on the Chinese Shenzhen stock exchange and has a market cap of $3.7 billion. It shares a number of clients with We Are Social, including Lenovo, Jaguar Land Rover and Cisco, and 50 per cent of its revenues are from digital.

Oscar Zhao, the chief executive, BlueFocus, said: "As the world’s largest specialist social media agency network, We Are Social provides the perfect platform for us to expand our digital operations outside China.

"We Are Social has been exceptionally successful over the last five years, and we’re confident that with our support, they can go on to do even bigger and better things."

Results International and Osborne Clarke advised We Are Social on the deal and BDO and Ashurst advised BlueFocus.