8th Oct 2019 10:34
(Alliance News) - S4 Capital PLC said Tuesday its global content arm MediaMonks has merged with US digital marketing agency Firewood and will raise GBP100 million to fund this and potential more acquisitions.
Firewood was founded in 2010 and employs 300 people across seven offices in the US, South America and Europe, led by founders Juan and Lanya Zambrano.
Firewood is guiding for a 30% jump in revenue for 2019, reaching USD73 million. Revenue has grown 60% and 70% in 2017 and 2018. Earnings before interest depreciation and amortisation and Ebitda margins have also "grown very strongly" S4 added.
S4 said the deal is expected to be "significantly accretive".
S4 will pay USD112.5 million for the merger, with about half paid in cash and the other half paid in S4 shares. A further payment of USD37.5 million will be made on the publication of Firewood's 2019 results, if targeted Ebitda is achieved.
Firewood shareholders will be issued 28.5 million S4 shares, valued at USD49.9 million in total.
To fund the cash portion of the deal, S4 is planning to raise GBP100 million through the issue of 70.4 million new shares at an offer price of 142 pence per share. Shares in the advertising agency were 9.3% higher in London in mid-morning trade at 153.00 pence each.
S4 noted the remainder of the GBP100 million could also be used to potentially fund further acquisitions.
S4 Capital Executive Chair Martin Sorrell said: "This merger is a further step in creating a new era communications services leader. Firewood has an enviable client list comprising many of Silicon Valley's finest; and we are delighted to welcome Juan, Lanya and their colleagues to the S4Capital family. We will now have over 1,800 professionals in 23 countries, with over 500 in each of two nodes, one in Silicon Valley and one in Amsterdam."
Firewood's clients include Facebook Inc, Alphabet Inc's Google, Microsoft Corp's LinkedIn, Salesforce.com Inc and VMware Inc.
By Paul McGowan; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
S4 Cap.