Sir Martin Sorrell’s new marketing communications venture has secured its second acquisition after a 150 million US dollar (£118 million) deal to snap up US firm MightyHive.
Sir Martin, the founder and former boss of advertising giant WPP, said the deal was an “important second strategic step” for S4 Capital as it looks to target the west coast of America and technology giants.
The acquisition of San Francisco-based MightyHive, which specialises
in programmatic marketing, is the second takeover by Sir Martin since he left WPP in April, following allegations of misconduct and that he misused company funds.
His new venture has already triumphed against WPP in a high-profile battle to buy Dutch firm MediaMonks, which also recently opened an office in San Francisco.
But Sir Martin has previously said S4 Capital would not compete head to head with WPP, and claimed his new company was a “peanut” in comparison.
Announcing the cash-and-shares deal with MightyHive, which is structured as a merger, Sir Martin said: “The peanut has now morphed into a coconut, and is growing and ripening.”
He added: “MediaMonks’ award-winning digital creative production and MightyHive’s market-leading programmatic offering will give S4 Capital’s clients end-to-end, fully integrated and seamless capabilities in purely digital marketing.
“Following both the MightyHive merger and the recent opening of the MediaMonks office in San Francisco, S4 Capital’s focus on the west coast of the United States and the digital natives at companies like Apple, Microsoft, Google and Facebook, not forgetting the software giants Adobe, Salesforce and Oracle, will intensify.”
The MightyHive deal is expected to complete on December 24.
S4 will set up a five million US dollar (£3.9 million) incentive scheme for MightyHive employees and will pay five million US dollars in restricted cash bonuses to the agency’s staff following completion of the deal.
Peter Kim and Christopher Martin, MightyHive’s chief executive officer and chief operating officer respectively, will be appointed directors of S4 Capital.
S4 floated capital in September, raising £51 million including a £40
million investment by Sir Martin.
Following his departure earlier this year, WPP carried out an inquiry into allegations that Sir Martin misused company funds, but details of the investigation were never disclosed.
It has been claimed that the probe looked into whether he used company cash to pay for a sex worker, allegations that Sir Martin has “strenuously” denied.