Sir Martin Sorrell eyes more deals after merger with Silicon Valley agency
Veteran ad man Sir Martin said he is looking to make another acquisition shortly after merging with San Francisco-based Firewood.
Sir Martin Sorrell has said he expects to make another acquisition “shortly” after merging his Dutch company MediaMonks with the largest independent advertising agency in Silicon Valley, in a deal worth 150 million US dollars (£122.5 million).
Speaking to the PA news agency, Sir Martin said the money left over from a £100 million fundraising after the merger with San Francisco-based Firewood will be spent on a takeover in the content area.
The deal is expected to cost 77.5 million dollars (£63 million) in cash, and the same in shares.
“There will be another thing coming,” he said, adding that the company also expects a couple of smaller takeovers in the data and analytics area.
When you're continually having to produce content on a real-time basis, and distribute it on a real-time basis, having a closer cooperation with an external agency or internal is becoming more and more important Sir Martin Sorrell
With clients including Facebook, Google and LinkedIn, the Firewood agency brings over 300 new staff across seven offices in the Americas and Europe to Sir Martin’s fledgling media empire.
Staff at the firm, founded by husband-and-wife team Juan and Lanya Zambrano, work as extensions of the internal marketing team their clients employ in a bid to combat what they call “inefficiencies” in traditional agencies.
It is expected to show revenues of 73 million dollars (£59 million) in 2019, the companies said, a 30% rise on last year.
Speaking to PA, the veteran ad man said the agency focuses on data-driven content and its “speed, quality and value” mantra fits well with MediaMonks.
The Firewood staff work as an extension of the clients’ internal teams.
“When you’re continually having to produce content on a real-time basis, and distribute it on a real-time basis, having a closer cooperation with an external agency or internal is becoming more and more important,” Sir Martin said.
The deal is the seventh Sir Martin has made since setting up S4 Capital.
The company has expanded to show revenues of nearly £88 million in the six months ended June 30. Its loss before tax reached around £8.5 million in the same period.
Sir Martin made his name at WPP, which he built into one of the world’s largest advertising agencies. He left in 2017 in controversial circumstances.
He snatched MediaMonks from under the nose of his former company for £266 million last July.
Sir Martin will settle an initial 112.5 million dollar (£91 million) payment for Firewood in cash and new shares in London-listed S4 Capital. The founders will be paid a further 37.5 million dollars (£30 million) if the firm reaches financial targets this year.
The deal brings together Adweek’s 77th fastest-growing agency, MediaMonks, and Firewood, which was 42nd on the magazine’s list.
Based in San Francisco, 67% of Firewood’s staff, and 64% of management, are women.