Ex-WPP boss Sorrell bounces back with new company
Martin Sorrell, who last month resigned as head of British advertising giant WPP after allegations of personal misconduct, announced Wednesday plans to launch a communications company.
Sorrell, 73, has invested £40 million ($53 million, 46 million euros) to help create an investment vehicle, S4 Capital, with the aim of turning it into a "multi-national communication services business", he said in a statement.
S4 Capital will meanwhile be set up by investment group Derriston Capital.
"The board of Derriston has reached agreement on the terms of a transaction to acquire S4 Capital Limited, a newly incorporated company that has recently completed a £51 million equity fundraising," the statement added.
Using a further £150 million from investors, the plan is "to build a multi-national communication services business, initially by acquisitions".
Sorrell, who will become executive chairman of S4, noted that there existed "significant opportunities for development in technology, data and content".
Derriston Capital was created in 2016 with the aim of acquiring companies operating in the medical products and devices sector.
WPP was formed in similar fashion, when in 1986 Sorrell turned Wire and Plastic Products, which made wire baskets for retailers, into a marketing services group.
"Until yesterday Derriston Capital was just one of several cash shells floating around on the London market," AJ Bell investment director Russ Mould said Wednesday.
"Derriston will purchase Sorrell's newly incorporated S4 Capital in a reverse takeover and, following the deal, the new entity will be renamed S4 Capital.
"With Sorrell as executive chairman and around £200 million in raised and committed funds, this buy-and-build effort is likely to create plenty of noise," Mould added.
Sorrell sensationally quit as chief executive of WPP after the company launched an independent probe into an allegation that he misused group assets.
While the investigation concluded that "the allegation did not involve amounts that are material", Sorrell shocked the industry with his surprise departure after 33 years at the helm.
© 2018 AFP