Sorrell makes his first deal after leaving WPP

LONDON: Sir Martin Sorrell’s ( pic) new venture acquired Dutch digital agency MediaMonks Multimedia Holding BV, beating his former employer WPP Plc in the auction and setting up a possible clash with the advertising powerhouse.

Sorrell’s S4 Capital Ltd is paying the owners of Amsterdam-based MediaMonks in shares of his investment company as well as cash, according to a statement. Other terms weren’t provided.

The purchase is part of an effort by Sorrell, 73, to rebuild his franchise after his abrupt ouster as chief executive officer from the world’s biggest advertising group in April.

WPP, the company he founded more than three decades ago, had also bid for MediaMonks.

The confrontation between the two over the Dutch agency may not be over. WPP last week had warned Sorrell that going after MediaMonks would represent a violation of his confidentiality agreement with his former employer, putting at risk his retirement package worth about £20mil (US$26mil).

Bloomberg previously reported that a purchase by Sorrell’s company of MediaMonks could come as soon as yesterday.

Sorrell had outbid WPP and rival suitors for the acquisition, at a price of about 300 million euros (US$352mil), Bloomberg reported.

MediaMonks, with revenue of about 110 million euros, employs more than 750 people and counts Adidas AG, Amazon.com Inc, Alphabet Inc’s Google and Johnson & Johnson among clients, according to the statement.

The company plans to focus on platform development, data analytics and digital media buying going forward.

Sorrell’s S4 has a plan to acquire Derriston Capital Plc, a listed shell company, and raise £1bil of equity for further deals.

His new venture has attracted the backing of City of London investors including hedge fund manager Crispin Odey. Still one of WPP’s largest investors, Sorrell has said he’s not out to damage the ad group with his new venture.

However, some other WPP shareholders have criticised the board for not including a non-compete clause in Sorrell’s contract to prevent him from going head-to-head with the company.

WPP shares are worst-performing among major advertising companies, as investors fret about its ability to contend with big market shifts, including declining spending by consumer giants and new competition from digital rivals and consultants.

Sorrell’s departure followed a stock plunge for WPP – which has lost almost a quarter of its market value over the past year – and its worst performance since the financial crisis.

He resigned suddenly after an investigation into allegations of misconduct by the board became public. Sorrell has denied any wrongdoing.