The marketing firm, headed by ex-WPP PLC (LON:WPP) boss Martin Sorrell, said the merger would cost US$112.5mln, to be paid half in cash and half in shares, with another payment of US$37.5mln if Firewood met its budgeted earnings (EBITDA) target for 2019.
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The agency is targeted to report revenues of US$73mln for the year, a 30% rise on 2018, and currently employs 300 people in 7 locations across the Americas and Europe.
Firewood aims to reduce the inefficiencies of traditional marketing agencies by embedding their employees into its clients’ internal marketing teams, with Facebook, Google, LinkedIn and Salesforce among its customers.
Sorrell. Who serves as S4’s executive chairman, said the merger was “a further step” for the company in creating a “new era communications leader”, while also expanding the group’s size to 1,800 employees across 23 countries.
In mid-morning trading on Tuesday, S4 shares were up 6.6% at 149.3p.