NEWS10 July 2018

Sorrell’s S4 Capital and MediaMonks to merge

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UK – Sir Martin Sorrell’s S4 Capital has acquired Dutch digital agency MediaMonks following a bidding war with WPP.

Sir Martin Sorrell

Sorrell pursued the deal despite his former company warning him that he would be at risk of losing his share awards package if the acquisition were to go ahead.

The merger is S4 Capital’s first move as it looks to build a “new era, new media solution embracing data, content and technology,” according to a statement.

Headquartered in Amsterdam, MediaMonks has 11 offices across Europe, the US, UK, Asia, Latin America and the Middle East. The company has revenues of around €110m and employs 750 staff, with clients including Adidas, Amazon, Google and Netflix. It picked up 18 awards at last month’s Cannes Lions.

MediaMonks’ founders will not receive an earnout from the deal, with shareholders instead receiving a mix of cash and shares in S4 Capital, which will become shares in the combined company. Following the merger, the combined company will be unitary, operating on a single profit and loss (P&L) basis.

Derriston Capital, the cash shell acquiring S4 Capital in a reverse takeover, is entering into an amended contract to reflect the merger with MediaMonks.

Sorrell left WPP suddenly in April, following an investigation on undisclosed personal misconduct allegations. He returned to the advertising market six weeks later with his new venture S4 Capital, to which he personally contributed £40m. At the time of the launch, he said: "S4 Capital is a company that aims to build a multi-national communication services business focused on growth. There are significant opportunities for development in technology, data and content. I look forward to making this happen."