Sorrell's S4 Wins Bidding War For MediaMonks

Martin Sorrell’s S4 has agreed to acquire Netherlands-based digital content company MediaMonks, the companies confirmed early Tuesday, outbidding WPP (and other companies) in the process. The price was not disclosed, but it had been previously reported that S4 would pay an estimated $350 million, with certain MediaMonks principals receiving equity in S4. 

The controversial acquisition followed a week of public squabbling between Sorrell and his former employer (he “retired” as CEO in April) WPP -- which argued that Sorrell was leveraging information about a potential MediaMonks transaction that he gained while still in WPP’s employ. WPP claimed Sorrell was in violation of a nondisclosure agreement by pursuing the transaction as head of S4, the investment company he is trying to build into a marketing-communications holding company. 



In addition to being “unlawful,” WPP let it be known that Sorrell was putting at risk $20-plus million in future payouts related to his separation agreement from the company. 

After S4's announcement this morning, WPP issued a statement: "“WPP’s lawyers wrote to Sir Martin’s lawyers last week pointing out the breach of his confidentiality undertakings in his approach to Mediamonks after his resignation from WPP. Despite subsequent protestations from Sir Martin’s lawyers, we are well aware of the facts and he has jeopardized his LTIP entitlement” 

Sorrell has denied any violations of an NDA. 

According to S4, MediaMonks has estimated annual revenues of around $146 million. The acquired firm has operations in the U.S., the UK, Europe, Asia, Latin America and The Middle East. Combined staff exceeds 750 and clients include Adidas, Amazon, GE, Google, Hyundai, Johnson & Johnson and Netflix. 

In addition to content production, the firm’s services include “digital experiences,” and ecommerce. Among the 18 awards it won last month at Cannes was a Grand Prix for Entertainment.

S4 noted that future acquisitions would focus on "further platform development, data analytics and digital media buying, run on a single P&L basis, as clients are increasingly demanding."

After his departure from WPP Sorrell began working with a UK investment firm called Derriston Capital, which as renamed S4 Capital with Sorrell as its executive chairman. The companies called the transaction a "reverse takeover" with Derriston's shares de-listed from the markets.

Per Tuesday's announcement the plan now calls for the merger of S4 and MediaMonks (not yet completed) which would then be acquired by a newly re-listed Derriston Capital. S4 would be the operating company and Derriston the parent. That process is expected to take another two months. 

This story has been updated with a WPP statement.  


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