Welcome to the U.S.-Ukraine Business Council

By Nazar Kudrevsky, Kyiv Post, Kyiv, Ukraine

Thursday, Sep 13 2007

WPP Group Plc, the world's second biggest advertising and marketing services company, has acquired a 49.9 percent stake in PBN Holdings, LLC, (The PBN Company), WPP announced Sept. 6.

The deal enables WPP to enhance its presence in the region and continue expansion of its business. With this deal, WPP will strengthen its positions in PR market, since currently only two of its PR agencies, SPN Ogilvy and Burson-Marsteller, operate on CIS markets.

Myron Wasylyk, senior vice president of the PBN office in Ukraine, said that the deal is a sign that the company's assets were effectively evaluated and the partnership provides PBN with great growth opportunities in the country.

PBN is a leading international integrated strategic communications consultancy focused on CIS countries. The company has offices in Kyiv, Moscow, Almaty, Riga, London, Washington, DC, and Chisinau. PBN provides services to many companies in the region.

"Our clients include market leaders in telecommunications, FMCG, companies in the energy sector, investment banks, investment funds and others,"
Wasylyk said.

PBN serves big multinational and regional blue chip companies. A list of the company's Western clients includes BP, Bristol-Myers-Squibb, Enel, Merrill Lynch, Mittal Steel, Motorola, Telenor, Xerox and the Western NIS Fund.

PBN also serves a range of the region's top businesses, including Basic Element, Ferrexpo, Renaissance Group, Sberbank UkrEximbank and others.

Wasylyk said that the PBN management had been receiving a great number of proposals on selling a stake in the company and that "actually, a proposal from WPP was more advantageous for that composition of the management which is now at the company."

He said that in principle, there is a possibility that WPP will want to buy the entire company, but if such a proposal were to be made, it would be considered only five years from now.

Wasylyk said that the amount of the deal, which was stated in Russian mass media as standing at about $20 million was an approximation of the real amount of the deal, which was signed Aug. 31.

The deal does not foresee any changes in PBN's operations and its current management composition. PBN's main shareholders will keep a controlling packet of the company's shares and the company will continue to operate under the PBN brand.

As for the company's current plans, Wasylyk said that "the key objective is to strengthen our position in the markets where we operate, and in Ukraine, it is to strengthen our offerings in government relations, services for financial communications and corporate communications."

The company is also looking for opportunities in other markets, but "in Ukraine, we feel that Ukraine is a really an untapped market and there are many opportunities here for the next five to 10 years," Wasylyk emphasized.

He noted that Ukraine's PR services market is currently undergoing capitalization, which is a positive sign. "Capitalization of the market players is taking place and this allows us to understand who the leaders are," he said.

PBN entered the Ukrainian market in 1996 as a team of managers that worked on a reform program funded by USAID. The company has been present on the Russian market since 1990.

PBN was founded by a married couple, Peter Necarsulmer and Susan Thurman, in 1983 in the US and continues to conduct active operations there.

LINK: http://www.kyivpost.com/business/general/27379/