S4 Capital reveals fresh US acquisition despite reports that Sorrell has expanded too much too quickly
Following damning weekend reports that suggested S4 Capital’s immense growth was unsustainable, the ad giant announced this morning that it would be combining MediaMonks and LA-based firm TheoremOne in yet another tech expansion.
With clients including Starbucks and American Express, TheoremOne has a team of over 370 experts and generated revenues of over $58m in 2021. The deal is also expected to add $8m to S4’s earnings before interest, tax, depreciation and amortisation in 2022, as reported by the Financial Times.
While S4 did not reveal how much it paid for the company, the deal is understood to be S4’s 30th acquisition in under four years, ballooning from three employees in late 2018 to 8,400 in 2021.
Chairman Sir Martin Sorrell said the acquisition would provide clients with a “genuinely integrated offer”.
A recent Sunday Times investigation slammed the company, revealing the finance team failed to accurately record sales on the computer system, and accused the S4-owned MediaMonks of regularly failing to pay social media influencers and other creditors on time.
It comes after S4’s shares plunged dramatically last month after the company announced it would be delaying its audit once again. Though Sorrell called this “unacceptable and embarrassing”, the series of delays raised alarm bells about the company’s financials.
The Sunday Times investigation even went as far as to suggest that MediaMonks still uses accounting software that insiders argue is inadequate for a company of its size.
Former WPP chief Sir Martin Sorrell has made a number of hefty acquisitions to bolster S4’s capabilities since its formation back in 2018, including a whopping $150m (£122m) acquisition of San Francisco-based ad tech company MightyHive.
Shares were up over two per cent this afternoon.