Aegis Group, the British marketing firm that is in the process of being acquired by Japan’s Dentsu for $5 billion this month, has announced that it has agreed a deal to buy China’s Catch Stone for an initial consideration of $86 milllion (550 million RMB).

The deal sees Aegis gain ownership of two businesses, Beijing-based Catch Stone Advertising and full-service digital media agency Catch Stone Culture Media, which is located in Shanghai. The acquisition is based on a four-year earn-out structure and high performance and profits could see the price rise to as much as $149 million (949.4 million RMB).

Formed in 2002, Catch Stone has a particular specialism in automotive and financial services, with former clients including Audi, Nissan and Saic GM. The company has a third office in Guangzhou and together, its three premises house 130 staff in China.

The Aegis announcement explains that the deal will boost the group’s competitive edge in China by further developing its digital services:

With Catch Stone, Aegis Media will have a strengthened position in digital media planning and buying in China, one of the world’s fastest growing advertising segments.  The acquisition of Catch Stone is in line with Aegis’s strategy of targeting acquisitions with a specific focus on digital businesses and faster-growing regions.

The newly acquired agency will become a separate Aegis business division, but it will work in conjunction with the group’s other brands that operate in China: Carat, Vizeum, Isobar, iProspect and Posterscope.

Aegis revealed that Catch Stone’s unaudited profits for 2011 hit $12.7 million (81 million RMB), before tax, while the firm’s gross assets are estimated at $58.97 million (375.9 million RMB).

The deal is the latest of a number of significant consolidations in China’s digital media space, and it follows WPP-owned Kantar’s January acquisition of social media research agency CIC, and Omnicom’s purchase of Nim Digital in April.

Last week Dentsu clarified that it would not be closing down any Aegis brands, as it seeks to avoid client conflicts once the acquisition is completed.

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