S4 Capital is the new marketing umbrella launched by Sir Martin Sorrell in 2018 following his shock resignation from WPP in April 2018. Unburdened by any no-compete restrictions, Sorrell was quick to plunge himself back into the fray. In the space of less than three months, he acquired control of publicly quoted shell company Derriston Capital, rebranded it as S4 Capital and completed his first acquisition: creative production network MediaMonks, apparently from under the nose of WPP itself. Unlike the WPP model, Sorrell is planning to develop his new group as a single integrated entity rather than a collection of separate companies. MediaMonks was not so much acquired by S4 Capital as merged into the umbrella group, with its principals joining the S4 board as directors. That company had revenues of approx €110m in 2018 and operates through 11 offices in 10 countries. Though it does develop some traditional advertising, it's best-known as a developer of digital content including VR and AR apps, and digital-enhanced experiences. It provides a solid platform for what Sorrell envisions will be a group offering "new era new media solutions embracing data, content and technology". A second major deal was confirmed in Dec 2018: programmatic media platform developer MightyHive, snapped up for $150m. Several other smaller purchases have followed, including Dutch production studio Caramel Pictures and Australian marketing technologists BizTech, specialists in Adobe Marketing Cloud. The group now divides its operations into two separate marketing practices of content and programmatic.
Capsule checked 3rd December 2018
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Recent stories from Adbrands Update:
Adbrands Daily Update 4th Nov 2019: S4 Capital is still small, but has evolved, in Martin Sorrell's words, from a peanut to a pumpkin in the space of a year. Revenues for Q3 were £56.6m, lifting the year-to-date figure to £144.6m. Content from MediaMonks and other creative studios accounted for just over 70% of the total, and programmatic media for the rest. By the end of the current quarter - in which several further acquisitions have been made - the group will be around the same size as M&C Saatchi or Engine by annual revenues.
Adbrands Daily Update 8th Oct 2019: Another month, another addition to S4 Capital's portfolio. Like its predecessors, Silicon Valley digital agency Firewood is a comparatively low-priced bolt-on at $150m, or almost three times last year's revenues. Like its predecessors too it has merged with the main operating business MediaMonks under a single global P&L. However it lifts the company's payroll to more than 1,800 employees spread across 23 countries. The two biggest divisions are in MediaMonks' home city of Amsterdam and now also in Silicon Valley. Together those two locations will now accommodate more than half the group's staff. An S4 statement said "This is another important strategic step towards delivering a purely digital, first party data-driven, faster, better and cheaper content and programmatic offer for clients worldwide."
Adbrands Daily Update 13th Aug 2019: Latest addition to S4 Capital's agency portfolio is Dutch influencer marketing agency IMA. The agency operates a network of around 40,000 international influencers around the world. IMA will merge with S4C's core unit MediaMonks. Sir Martin Sorrell commented, "This merger is yet another example of our focus on top line growth. Influencer marketing is an important sub-set of the digital content marketing industry and is predicted to double in size over the next three years."
Adbrands Daily Update 26th Apr 2019: S4 Capital appears to have timed an announcement of further acquisitions to coincide with WPP's disappointing 1Q results. MediaMonks acquired Amsterdam-based production studio Caramel Pictures, while MightyHive expanded its presence in Latin America with the bolt-on of programmatic specialist ProgMedia.
Adbrands Daily Update 18th Mar 2019: S4 Capital reported a solid set of results for its first year of trading. Pro-forma billings for the whole of 2018 - including a full year from MediaMonks and Mighty Hive - would have been £291.2m, with net revenues of £135.9m. Since those two acquisitions were both made mid-cycle, S4's reported revenues were £54.8m, reflecting part-year contributions from both companies. S4 also reported an operating loss of £8.5m as a result of adjustments and goodwill.
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