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Martin Sorrell & # 39; s
new marketing company has agreed to acquire a digital production agency based in the Netherlands, leading a
WPP
PLC, the advertising giant that he spent decades building
Financial terms were not disclosed, but people familiar with it Business say Mr. Sorrell's new business, which he plans to call S4 Capital, will pay about 300 million euros ($ 352 million) to MediaMonks in cash and shares
. Sorrell's pursuit of MediaMonks shows that the 73-year-old executive has not lost his appetite for acquisitions, especially if it means dueling with his former employer on pricing assets. In 1985, Mr. Sorrell took a fictional company called Wire & Plastic Products and used it to make a series of acquisitions, eventually building the largest group of ads in the world with a capitalization. stock market of more than 15 billion pounds sterling.
In April, Mr. Sorrell resigned as WPP's Executive Director after the Wall Street Journal reported that the company's board was considering an allegation of inappropriate personal behavior and whether Mr. Sorrell had abused his assets. the society. Mr. Sorrell rejected the "unqualified" allegation at that time
The investigation examined whether Mr. Sorrell had used the company's money to pay a prostitute , the Journal reported, citing people familiar with the survey. Mr. Sorrell denied visiting a prostitute and having paid with the company's money.
An agreement for MediaMonks marks Mr. Sorrell's first acquisition since he resigned from WPP, and his willingness to bid against the ad giant is escalating tensions between the two parties
. In 2001, MediaMonks produces games, movies and websites, and its use of technologies such as virtual reality has made it a coveted company for advertising agencies whose customers are looking for advanced technologies for their advertising. It employs more than 750 people and has worked for companies
Adidas
AG
,
Netflix
Inc.
and health products company
Johnson & Johnson
.
Last week, WPP lawyers wrote to Mr. Sorrell's lawyers to warn him that he was "likely to violate his confidentiality commitments" about his pursuit of MediaMonks , according to a person who examined the letter. The letter indicated that Mr. Sorrell could lose rewards in shares worth several million pounds that were part of his long-term incentive program with WPP, the person said.
The letter indicated that WPP was beginning to explore an acquisition of MediaMonks last November. Mr. Sorrell traveled to the Netherlands to meet the leaders of the production company, according to the person. During this period, Mr. Sorrell was also able to evaluate MediaMonks' business, customer base and future prospects, according to the letter.
"As a result, [Mr. Sorrell] became aware of WPP's detailed confidential information. It was able to acquire through its role at WPP," said the letter, according to the person.
"This is a problem for lawyers, but Sir Martin emphatically denies any violation of anything," said a spokesman for Mr. Sorrell
. Sorrell described S4 Capital as a "peanut" too small to compete with an advertising giant like WPP.
Yet, the acquisition is the first step in Mr. Sorrell's mission to build a "new era" marketing group focused on data, technology, and content creation. He has been increasingly critical of WPP in his public appearances, blaming his management for the events leading up to his departure and calling his decision to offload a minority stake in the software company Globant. of "significant error".
We are trying to restore the revenues they have lost, as some advertisers who once kept the agencies on lucrative mandates began to limit their spending to one-time projects. By investing in production, advertising agencies can diversify their revenue sources in projects that still require a production studio to film, mix the soundtrack, or code a video game.
Write to Nick Kostov at [email protected]
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