Sorrell's S4 Capital confirms $150m MightyHive acquisition

'The peanut has morphed into a coconut,' Sir Martin Sorrell proclaims as new venture makes second purchase.

S4: Sorrell and Kim
S4: Sorrell and Kim

Sir Martin Sorrell’s new venture, S4 Capital, has formally announced that it is in advanced talks to buy MightyHive, a programmatic marketing services agency, as its second acquisition. 

S4 is acquiring MightyHive for $150m (£117m), the company announced on the London Stock Exchange this morning.

Mightyhive, whose chief executive is Peter Kim, a former head of ad platform business development at Google, advises brands on taking their digital marketing in-house. It sells itself as a "new breed of media consultancy" that provides media operations and training services, as well as data strategy and analytics.  

The company has its headquarters in San Francisco, with offices in New York, London, Toronto, Singapore, Stockholm and Sydney.

The announcement comes five months after Sorrell swooped for MediaMonks, a digital agency with headquarters in Amsterdam, as his first major purchase under S4.  

Once S4 has both MediaMonks and MightyHive, it intends to provide global and regional brands with digital marketing services concentrated in three areas:

• The development of a global digital platform

• First-party data fuelling both digital media planning and creative ideas

• Digital media buying

The deal will allow MightyHive to increase its global scale and offer a new integrated solution that will be amplified by the strength of its partnerships with Google, Amazon and Facebook, the company said in a separate announcement

Meanwhile, Sorrell explained that S4 is structured on a "unitary" basis, with key people throughout the business being incentivised through "significant equity ownership". 

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

"MediaMonks' award-winning digital creative production and MightyHive's market-leading programmatic offering will give S4 Capital's clients end-to-end, fully integrated and seamless capabilities in purely digital marketing."

S4's focus on being close to Silicon Valley in California would "intensify", Sorrell added, following the MightyHive acquisition and the opening of a MediaMonks office in San Francisco. 

Founded in 2012, MightyHive has posted a strong growth record in recent years, having increased revenue from 2015 to 2017 at a compound annual growth rate of 129%.

Sorrell launched S4 in May, within weeks of resigning as chief executive of WPP, the world’s biggest advertising company, amid an investigation into misconduct. Sorrell has denied wrongdoing.

As a result of the merger, MightyHive will become a wholly owned subsidiary of S4. Kim will join the S4 board of directors, alongside chief operating officer and co-founder Christopher Martin. Both will remain in their existing roles. 

Sorrell is also making MediaMonks co-founders Victor Knaap and Wesley ter Haar, as well as the agency’s chief financial officer Peter Rademaker, directors of S4.