Sir Martin Sorrell’s advertising and marketing firm S4 Capital PLC (LON:SFOR) has agreed to buy US programmatic ad firm MightyHive for an enterprise value of US$150mln.
Sorrell, the founder and former chief executive of advertising giant WPP PLC (LON:WPP), said the merger marked an “important second strategic step for S4 Capital”.
“The peanut has now morphed into a coconut, and is growing and ripening,” he said.
The deal will be funded by the issue of new shares worth £74mln. The merger is expected to be “significantly accretive” to earnings in the first full financial year following completion.
It marks S4’s second acquisition since Sorrell set up the company after stepping down from the helm of WPP in April amid allegations of personal misconduct, which he has denied.
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In July, S4 beat WPP in the race to buy Dutch firm MediaMonks for €300mln.
“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,” Sorrell said in Tuesday’s announcement.
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“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.”