Martin Sorrell's S4 buys ad firm MightyHive in $150m deal

Former WPP chief’s new group says it can now offer full range of digital marketing services

Sir Martin Sorrell has agreed to buy the San Francisco ad tech company MightyHive in a $150m (£117m) deal, his second acquisition since leaving WPP and setting up the new venture S4 Capital earlier this year.

Sorrell, who set up S4 Capital weeks after being forced out of WPP following an investigation into allegations of personal misconduct, has said his new venture is just a “peanut” in comparison to the global scale of his former employer.

“The merger with MightyHive marks an important second strategic step for S4 Capital,” said Sorrell. “The peanut has now morphed into a coconut, and is growing and ripening.”

Sorrell, who previously said that making a success of S4 Capital would be “the best form of revenge” against WPP, made his first acquisition in July with a €300m deal to buy the Dutch company MediaMonks.

“Clients of all kinds want services delivered faster, better and cheaper, by more agile and responsive organisations,” he said, in what appeared to be a thinly-veiled swipe at his former company, which employs 200,000 staff globally.

By buying MightyHive – which specialises in programmatic advertising, the automation of buying and selling digital advertising space – S4 Capital says it can now offer full-service digital marketing from creative work to media planning and buying campaign advertising space.

S4 Capital has secured “long-term” employment arrangements with “key” MightyHive executives, including former Google executive Peter Kim, who runs the business. S4 has also agreed to pay $5m in cash bonuses to MightyHive staff when the deal completes, and has set up a $5m incentive scheme.

“Key people [will] continue to be incentivised through significant, equity ownership in the enterprise as a whole,” said Sorrell. “This strategy and structure will deliver significant long-term value for share owners.”

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

At WPP Sorrell famously had an unusual employment contract stating that he, or the company, was able to terminate it “at will”, with no non-compete clause. That has enabled him to immediately set up a new, rival operation.

MightyHive made $41m in revenue and $11m in profits in the year ending 31 October. Sorrell’s two businesses employ more than 1,100 staff globally, 900 at mediaMonks and 200 at MightyHive.

S4 Capital is raising £74m to fund the cash and shares deal. Stanhope Capital, where Sorrell has been an advisory board member since 2011, is leading the capital raising, which will see £28.1m come from selling new shares at 110p each, and a further £46m via a placing and open offer.


Mark Sweney

The GuardianTramp

Related Content

Article image
Martin Sorrell beats WPP to £266m MediaMonks deal
Takeover marks mogul’s first acquisition since he was forced out of media group he founded

Mark Sweney

10, Jul, 2018 @7:29 AM

Article image
Sir Martin Sorrell battles WPP in bid to buy first firm
S4 Capital and Sorrell’s former advertising group both seek to acquire MediaMonks

Mark Sweney

03, Jul, 2018 @10:27 AM

Article image
Martin Sorrell fan club takes risks with S4 Capital venture | Nils Pratley
The backers go for calculated gamble in signing away their normal voting rights

Nils Pratley

31, May, 2018 @9:07 AM

Article image
The questions WPP's board can expect to face over Sir Martin Sorrell
Directors will be questioned by shareholders at the advertising group’s AGM this week

Rob Davies

13, Jun, 2018 @9:14 AM

Article image
Sir Martin Sorrell: Facebook row hasn't deterred advertisers
Ex-WPP chief says marketers are turning to Instagram and predicts more digital growth

Mark Sweney

26, Dec, 2018 @1:34 PM

Article image
Martin Sorrell on verge of £266m MediaMonks takeover
Move will escalate hostilities with WPP, the advertising firm he founded but left in April

Rob Davies and Mark Sweney

09, Jul, 2018 @4:36 PM

Article image
Ad mogul Sir Martin Sorrell: 'I didn't want to retire – I have a point to prove'
The former WPP boss on the economy, Facebook and why his S4 Capital is growing despite the coronavirus crisis

Mark Sweney

21, Jul, 2020 @5:00 AM

Article image
Retirement doesn’t suit Sir Martin Sorrell, but making a point does
The former WPP millionaire has a new media startup and is the latest mogul who won’t go gently into the night

Mark Sweney and Sarah Butler

02, Jun, 2018 @3:00 PM

Article image
Martin Sorrell's CEO role in doubt as WPP investigates misconduct claims
Pressure mounts on founder and boss of world’s largest marketing group over allegations of financial impropriety

Mark Sweney Media business correspondent

04, Apr, 2018 @7:20 AM

Article image
Martin Sorrell's WPP reports worst year for growth since 2009
World’s largest advertising and marketing services group records 0.9% fall in revenues to £15.2bn

Mark Sweney

01, Mar, 2018 @9:24 AM