Lots of gossip over the weekend that S4 Capital’s Sir Martin Sorrell has been putting the finishing touches to a big deal, his biggest so far since kicking off S4 with the £300m acquisition of MediaMonks.
In hindsight MediaMonks looks like a bargain, the foundation of his new $2bn empire. The other mainstay is programmatic media specialist MightyHive. A number of smaller agencies and tech specialists have been added since.
We’ve been saying for ages that, at some stage, Sorrell (above) will make a big move. He needs one to rival the company he founded WPP (value around £7bn, way down on what it was worth a few years ago) and, if something emerged, would surely find the opportunity irresistible. Earlier this year S4 raised a further £116m from shareholders (including Sorrell) which gives it more firepower if the banks play ball with more debt.
Quite what it would be is anyone’s guess. Sorrell says S4 is a digital-only operation so that, presumably rules out a big ad agency although not, perhaps, a media agency. He’s said he’s interested in “first party data” but that doesn’t come cheap and with data businesses under pressure from legislators over privacy issues S4 may be better off being a buyer of data than an originator. Many of S4’s tech clients have reams of the stuff already.
But Covid-19 has collapsed valuations of all sorts of companies. If Sorrell is, indeed, to make a big move now would be a good time.