Sorrell bounces back with the launch of S4 Capital
The Former WPP Chief Executive, Sir Martin Sorrell has bounced back to the front line in the advertising industry with the launch of a new “multinational communication services business” called S4 Capital.
Sorrell, 73, who left WPP in April, is taking charge of a shell company, Derriston Capital, which will become a new advertising venture, S4 Capital. He said S4 Capital aimed to build a “multi-national communication services business”.
“There are significant opportunities for development in technology, data and content. I look forward to making this happen,” added Sir Martin, who will be executive chairman of S4 Capital.
Derriston was a cash shell company listed on the London Stock Exchange in 2016 to acquire healthcare businesses.
It did not complete any deals in the sector and more recently had asked shareholders for permission to look for investment opportunities in other areas.
S4 Capital was set up recently by Sir Martin and has already raised £51m, with Sir Martin contributing £40m.
News of the venture first broke last night, but Sorrell had dismissed the reports as “market speculation”.
S4 Capital said it is already in “preliminary discussions” regarding potential acquisitions.
Sorrell, who becomes executive chairman of the London-listed company, has contributed £40m to the launch of S4 Capital, with a further £11m coming from institutional and other investors.
The firm recently completed a £51m equity fund raise, and has received non-binding letters of support for more than £150m in further funds.
Alongside Sorrell, Sky Bet chairman Paul Roy and former HSBC Investment Bank managing director Rupert Faure Walker have joined the business as non-executive directors.
“S4 Capital is a company that aims to build a multinational communication services business focused on growth. There are significant opportunities for development in technology, data and content. I look forward to making this happen,” Sorrell said.
The method of launch – by seizing control of a publicly-listed firm and using it as a shell for acquisition – closely follows the approach used by Sorrell to acquire and develop WPP as an advertising holding company.
The reverse takeover deal with Derriston is a quick way for S4 Capital to get a stock market listing. However, it still needs the approval of Derriston shareholders.
Sorrell has been allowed to launch S4 Capital as he did not have a non-compete clause in his contract at WPP.
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