S4 Capital has confirmed it will be merging with MightyHive, a US programmatic advertising firm, for an enterprise value of $150 million.
The London-based group said the deal furthers its strategy of aligning award-winning digital creative content, digital media planning and buying and first-party data capabilities.
“The merger with MightyHive marks an important second strategic step for S4 Capital,” said executive chairman Sir Martin Sorrell, a businessman and founder of PR and advertising giant WPP plc.
“The peanut has now morphed into a coconut, and is growing and ripening.”
Sir Martin kicked off his new venture with the takeover of a Dutch digital production company called MediaMonks in July.
It marked his first acquisition since his abrupt departure from WPP, which he ran for 33 years, earlier this year.
Commenting on the latest deal, Sir Martin said MediaMonks’ digital creative production and MightyHive’s 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,” he added.
Alongside the deal, the company has also announced the appointments of Victor Knaap, Wesley ter Haar and Peter Rademaker as directors of the company.
Meanwhile, MightyHive CEO Peter Kim and COO Christopher Martin have also been appointed.
S4 Capital will fund the cash portion of the acquisition by raising £28.1 million through a firm placing and £45.9 million through an open offer through the issue of almost 67.3 million new shares priced at 110 pence each.
This new capital raising is led by the Stanhope Entrepreneurs Fund, a growth-capital fund managed by Stanhope Capital, the global investment and advisory group. Stanhope will be a long term strategic partner for S4 Capital and Daniel Pinto, Stanhope Capital’s founder and CEO, will join the company’s board.
Looking ahead, Sir Martin said S4 Capital will provide clients and “influencer-driven millennial brands” with new age/new era digital marketing services concentrated in three key areas initially: the development of a global digital content platform’ first-party data fuelling both digital media planning and creative ideas; and digital media buying.
“Clients of all kinds want these services delivered faster, better and cheaper, by more agile and responsive organisations, either in-house, co-located with them or alone,” he said.
S4 Capital has a market cap of €250 million. It has projected revenues of £100 million for 2018 and operates from 11 offices in 10 countries, employing 800 people.