S4 Capital, Martin Sorrell’s investment vehicle, is growing headcount at MediaMonks by a fifth with the acquisition of nine-year-old U.S. agency Firewood.
Firewood offers digital marketing services including creative, strategy and planning, performance media and technology.
S4 is paying $112.5 million (£91.7 million) on completion, half in cash and half in S4 ordinary shares, with a further payment of $37.5 million (£30.6 million) on publication of Firewood's accounts for 2019, if budgeted EBITDA is reached. It is being funded from a capital raise of £100 million announced by S4 on Tuesday morning.
Firewood was founded by Lanya and Juan Zambrano in Silicon Valley and has expanded in the U.S. and into Mexico City, Dublin and London. It employs more than 300 people.
S4 described the deal as "another important strategic step towards delivering a purely digital, first-party-data-driven, faster, better and cheaper content and programmatic offer for clients worldwide, with a unitary business model."
"Firewood has an enviable client list comprising many of Silicon Valley’s finest," Sorrell added. "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 claims to serve clients better than traditional agencies by "deploying teams of creative and strategic marketing professionals who work as extensions of their clients’ internal marketing team."
"We came from the client world and had a very different and non-agency mindset," said Juan Zambrano, Firewood’s chief executive. "From day one, we created an integrated and disruptive model built on transparency and collaboration that supported becoming extensions of our clients – something that other agencies weren’t doing."
With the addition of Firewood, MediaMonks' headcount will be more than 1,800.
"Firewood’s 'embedded' approach will allow us to build deeper and broader relationships with our clients, helping us work in a more flexible, collaborative and integrated way," said Wesley ter Haar, COO at MediaMonks.
Firewood is also proud of its diverse culture, with agency president Lanya Zambrano pointing out that 38% of employees are from diverse ethnic backgrounds, 67% are women and its leadership team is 64% women.
"The richness of our differences creates our collective value. We embrace finding diverse talent," she said.
Firewood’s London office was set up in April and is located in Holborn, with staff reporting to Firewood Europe MD Emmet McCaughey.
Revenues at Firewood are targeted to reach $73 million (£59.5 million) in 2019, up by more than 30% on 2018.
This story first appeared on campaignlive.co.uk.