Martin Sorrell's S4 Capital Acquires Programmatic Player MightyHive for $150 Million

S4 Capital, Martin Sorrell's self-described new age/era digital advertising and marketing services company, announced Tuesday morning that it has entered into an agreement to acquire programmatic solutions provider MightyHive for $150 million. Victor Knaap, partner and CEO of MediaMonks—the production company S4 bought for $350 million in July—and Wesley ter Haar, co-founder and chief operating officer of MediaMonks, were named executive directors of the company effective immediately. MightyHive CEO Peter Kim and chief operating officer Christopher Martin will also come aboard as directors when the deal closes, which is expected to be on Dec. 24. S4 will fund the cash portion of the deal by issuing 67 million new ordinary shares at a price of 110 pence ($1.40) each. A growth capital fund managed by global investment and advisory group Stanhope Capital will lead a capital raising of 28.1 million pounds ($32 million) and open offer to raise 45.9 million pounds ($52 million). Stanhope will be a long-term strategic partner to S4, and its founder and CEO, Daniel Pinto, will also join the company's board of directors. Sorrell told Adweek following the announcement of the deal that S4 is now "three-fourths to seven-eighths complete," with its strategic vision for the company focused on "three areas of business: digital content, first-party data and digital media planning and buying." "MediaMonks is the first pillar around digital content," Sorrell said. "MightyHive is the second pillar around digital media planning and buying or programmatic. Both companies use first-party data, and obviously, we want to develop that further." He added, "We may do something else in the digital content or first-party data areas," when asked what the industry should expect next from S4. However, Sorrell said the company is now focused on broadening and deepening client relationships and "organic growth from here." "We are excited about the opportunities ahead, but for now, you can expect business as usual," Kim commented in a statement on the MightyHive website. "As we mark this milestone in our shared history, please know the team at MightyHive is proud to join forces with S4 Capital and MediaMonks because of one reason: it allows us to serve you, our clients and partners, in a way that was impossible in the past and will drive the future." MightyHive was founded in 2012 and is based in San Francisco with offices in New York, London, Toronto, Singapore, Stockholm and Sydney. According to the company, it provides consulting and other services around media operations and training, data strategy and analytics. Among its core competencies, MightyHive specializes in helping advertisers optimize the Google Marketing Platform, formerly known as DoubleClick until a rebrand earlier this year, and is often a beta partner for the online giant’s new products. For instance, earlier this year it was named as an early participant in the beta program of Google Attribution 360. S4 noted that MightyHive grew its revenue from 2015 to 2017 by 129 percent and expects the deal to be "significantly accretive to earnings per share in the first full financial year following completion." It said it will set up an incentive scheme with an aggregate value of $5 million for MightyHive's employees and will pay $5 million in restricted cash bonuses to them following the completion of the deal. Sorrell added in a statement that his "peanut has now morphed into a coconut and is growing and ripening." "Following both the MightyHive merger and the recent opening of the MediaMonks office in San Francisco, S4 Capital's focus on the West Coast of the United States and the digital natives at companies like Apple, Microsoft, Google and Facebook—not forgetting the software giants Adobe, Salesforce and Oracle—will intensify," Sorrell commented. Speculation on the impending deal began to spread last month. This is Sorrell’s second acquisition since he left WPP. Sources told Adweek previously that S4 bid against China’s data technology company BlueFocus for MightyHive. Ad-tech reporter Ronan Shields contributed to this reporting.