When asked recently how he’d been spending his time in lockdown, Sir Martin Sorrell answered that he was spending his days tending his “lemons and oranges” at his swanky home in London’s grandest suburb, Belgravia.
However, if media reports out of the UK over the weekend are any indicator, Sorrell’s horticultural claims are a mere smokescreen to news of a “big” acquisition set to be announced any minute.
Gossip on media sites suggest Sir Martin is plotting his biggest move since launching S4 Capital in 2018 after he left WPP in acrimonious circumstances.
Although actual details are vague, reports say it will dwarf S4’s $400 million acquisition of MediaMonks.
Sorrell has made no secret of his disdain for WPP since his departure and has used his significant media presence to besmirch the holding company and its senior management at every given opportunity. Sorrell remains a significant WPP shareholder and has repeatedly called for it to be broken up, adding the GroupM business is about the only part of WPP worth worrying about.
In recent months, S4 has set about raising £116 million in equity fundraising which will give Sorrell significant firepower to carry out bigger bids. So far S4 has launched more than 10 takeovers of digital ad agencies to build a group worth nearly £2billion.
Sorrell has never shied away from his ambition that S4 would one day be bigger than WPP, so UK analysts expect his next move to be a biggie. And with COVID biting bottom lines, now’s the time to muster yourself up a discount on some distressed stock.
The 75-year-old has repeatedly said S4 is a digital-only operation and that he’s only interested in agencies that use “first party data”. Taking that as a rule, that arguably rules out S4 acquiring a large creative agency, with a media business the most likely option.
In June, Sorrell told B&T’s Cannes Uncanned series: “When I left WPP (in 2018) there were only three areas of the business that were growing and one was digital advertising content, the other real-party data and the third was programmatic, data and analytics. And that’s what S4 has done, focus on those areas and the rest is history.
“Digital is where you need to be. Agencies that understand digital realise where the growth is. In 2019, the media business was worth about globally about $US600 billion and $US245 of that was in digital. Traditional media will be down about 20 per cent.
“We have four principals [at S4]. One, be purely digital. Secondly, focus on data that drives advertising and programmatic. The third is to be faster, better, cheaper. Lastly, we have a unitary structure; we’re not doing fragmented earn-outs that splinter the company. We’re looking for people who buy into our mission which is a new age, new era advertising, marketing and services company,” he said.
