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S4 Capital to merge with MightyHive
Posted on Tuesday, 04 December 2018 14:51
Martin Sorrell’s media company, S4 Capital is acquiring US-based programmatic advertising group MightyHive for an enterprise value worth USD 150.00 million.
The buyer is funding the cash portion of the deal by issuing 67.27 million shares at GBP 1.10 per new ordinary share by way of a firm placing to raise GBP 28.10 million, along with an open offer to finance GBP 45.90 million.
Furthermore, S4 will set up an incentive scheme with an aggregate value of USD 5.00 million for the target’s shareholders, and will pay USD 5.00 million in restricted cash bonuses upon completion.
Formed in 2012, MightyHive specialises in algorithms which are used to buy and sell advertising space online, which fits in with buyer’s plans to establish a new media business comprising digital media planning and first-party data capabilities.
It has sites worldwide, including San Francisco, New York, Sydney, London and Toronto, and claims to be the original doubleclick certified marketing partner, making it one of the fastest growing programmatic businesses globally.
For the 12 months to 31st October 2018, MightyHive posted revenue of USD 40.70 million, and had earnings before interest, taxes, depreciation and amortisation of USD 11.10 million.
The merger will add to Sorrell’s media portfolio, having out-bid his former business WPP to buy Dutch digital agency MediaMonks for EUR 300.00 million back in July.
At the time, he noted that the purchase will help set up a core platform, which will be strengthened by the addition of media businesses.
Through the merger, the buyer will increase its network and gain access to industry giants such as Google, of which MightyHive is its largest marketing platform company.
As a result of the acquisition, S4 will be able to provide a comprehensive range of services including premium creative production, full technology stack expertise and in-house consultancy.
The transaction represents a revival for Sorrell, after being forced out of WPP earlier this year amid allegations of bullying junior employees and inappropriate behaviour in his private life, including using company funds to pay for sex workers.
S4 has over 800 employees across ten countries, has a market capitalisation of around EUR 250.00 million, and has projected revenues of GBP 100.00 million for 2018.
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