(Adds details on deal, Firewood and S4)
Oct 8 (Reuters) – S4 Capital’s content unit, MediaMonks, is set to merge with Silicon Valley’s biggest independent agency, Firewood, as the Martin Sorrell advertising vehicle ramps up its digital push and raises funds to expand.
The deal, which values San Francisco-based Firewood at up to $150 million on a debt- and cash-free basis, will be funded in part through an issue of shares raising about 100 million pounds ($122.94 million), S4 Capital said on Tuesday.
S4 Capital, launched by Sorrell last year after he left the world’s biggest advertising company WPP, said the placement proceeds would fund the $77.5 million cash portion of the Firewood deal, and other potential acquisitions.
The London-listed firm has been growing its presence and is keen to mark more acquisitions to boost its content, programmatic buying, and data and analytics capabilities.
In August, MediaMonks had merged with influencer marketing company IMA to bolster production. The new deal will give S4 Capital access to Firewood’s client base in the United States, including Facebook, Google, LinkedIn, Salesforce and VMware.
Small- and medium-sized companies advertising on digital platforms for the first time are continuing to drive growth in the United States, where consumer spending chugs along at a steady pace.
S4 has already won work from the likes of Procter & Gamble, Nestle, Coca-Cola and Sprint and had said it was being asked to bid for other major clients.
($1 = 0.8134 pounds) (Reporting by Pushkala Aripaka in Bengaluru, Editing by Sherry Jacob-Phillips)
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