Sorrell's S4 spending spree snares Brazilian and Dutch targets
25 April 2019, 18:10 | Updated: 25 April 2019, 19:24
Sir Martin Sorrell's new marketing services venture will reinforce its pursuit of international acquisition targets on Friday when it unveils takeovers of companies based in Amsterdam and Sao Paulo.
Sky News has learnt that S4 Capital, the vehicle established by Sir Martin after he left WPP Group last year, has struck deals to buy Caramel Pictures and ProgMedia, a programmatic advertising consultancy.
The purchases will see Caramel, which focuses on food and beverage industry clients, become part of MediaMonks, S4's creative digital content producer.
Caramel's clients include The Coca-Cola Company, Danone, Nestle and Unilever.
Meanwhile, S4 intends to merge ProgMedia with MightyHive, the San Francisco-based advertising technology group which Sir Martin agreed to buy last December for $150m.
The two acquisitions, the combined value of which is unclear, are expected to be announced on Friday.
As part of the ProgMedia deal, the Brazilian company's two founders - former Google employees Bruno Reboucas and Natalia Fernandes - will become shareholders in S4, according to a person close to the situation.
Sir Martin's decision to target acquisitions in the digital content and programmatic media arenas reflects the priorities of what he describes as a marketing services group for a new era.
According to S4, digital media accounted for roughly 40% of the $500bn global advertising market, with that share expected to grow to approximately 55% by 2022.
While Sir Martin's pipeline of takeover candidates looks very different to those he pursued in the early part of his WPP reign, the playbook of bolt-on acquisitions and targeting of faster-growing geographies is similar.
Over more than three decades, he built WPP into a global force, presiding over hundreds of acquisitions in disciplines such as advertising, media buying, public relations and sports marketing.
Sir Martin remains a significant shareholder in WPP, with much of his wealth tied up in the stock of the company he took from a manufacturer of shopping baskets in 1985 to bestriding the global advertising industry.
By the time he stepped down in April, WPP was valued by the stock market at more than £16bn, although a series of client losses and accelerating shifts in spending among global advertisers away from traditional media have hurt its share price.
The S4 Capital chairman's acrimonious exit from WPP sparked a legal barrage between the two parties, although a threat by the company to withhold part of his long-term compensation on the grounds that he had breached confidentiality obligations has dissipated.
Mark Read, Sir Martin's successor, has embarked upon a drive to streamline WPP by merging some of its agency subsidiaries, while he is also exploring the sale of a controlling stake in Kantar, its market research business.
S4's stock market debut came less than six months after Sir Martin's WPP exit, and was quickly followed by outbidding his former employer for MediaMonks - despite his insistence that he was not seeking to compete with it.
An S4 spokeswoman declined to comment.
(c) Sky News 2019: Sorrell's S4 spending spree snares Brazilian and Dutch targets