Sorell's S4Capital continues deal spree with Cashmere merger

Lucy Harley-McKeown
File photo dated 21/11/2016 of Sir Martin Sorrell whose ad agency S4Capital issued another profit upgrade as the company revealed it continues to benefit from the global recovery. Bosses at the company set up by the advertising guru in 2018 said business in the past few months has been particularly strong as countries start to ease Covid-19 restrictions and companies increase marketing spends further. Issue date: Monday July 19, 2021.
The deal is the latest in a string of 25 acquisitions since Sir Martin Sorrell's S4 Capital launched three years ago. Photo: PA (PA)

Sir Martin Sorrell has moved to expand his global marketing services empire with the buyout of LA-based agency Cashmere.

The merger between Sorrell's S4 Capital's (SFOR.L) Media.Monks and Cashmere was announced on Wednesday morning. Cashmere boasts clients such as Instagram, Netflix (NFLX), Disney (DIS), Google (GOOGL), Adidas (ADDYY) and BMW.

S4 said the merger "significantly expands the capabilities of both its content practice in the USA and global cultural strategy."

S4 has now expanded into 33 countries around the world, employing around 6,000 people.

Cashmere was founded in 2003, by Ted Chung and Seung Chung and employs 150 people.

The deal is the latest in a string of 25 acquisitions since S4 launched three years ago. The company filing announcing the deal didn't state the price but reports by Sky News suggested it would be funded by cash resources.

It follows the group raising its profit forecasts because of a recovery in the global economy.

At the time, the company said it expects underlying revenues and gross earnings to rise by 30% this year after a jump in activity in the first quarter. Previously, it had targeted 25% growth.

Read more: Mental health breaks: Why more companies should follow Nike and Bumble

S4 stock made muted moves higher on Wednesday morning in London. Over the last six months the stock price has almost doubled from 430 pence-per-share to 814 — bringing the market cap to around £4.5bn ($6.2bn).

Earlier this year S4 bought Decoded Advertising, a creative agency, and Metric Theory, a data-driven digital agency. It also bought Tomorrow, a 50-person Shanghai-based creative agency.

Watch: Should I book a holiday in 2021?

Advertisement