S4 and MSQ in Early-Stage Merger Talks

Sir Martin Sorrell's S4 Capital has confirmed it is in early stage discussions with marketing group MSQ Partners, about a possible merger.

S4 has stressed that the talks, which were first reported by Sky News on Saturday, are preliminary, and there is no guarantee any deal will be struck. In its note on Monday S4 said a deal would involve its acquiring MSQ, which is majority-owned by private equity group One Equity Partners.

Analysts suggest a potential merger would give S4 Capital access to a broader range of clients: MSQ has more than 250, including Unilever, Haleon, P&G and Lego.

MSQ was established in 2011 and offers services including advertising, PR, design, brand strategy and direct digital marketing, via a dozen subsidiary agencies including analytics, insights and strategy firm Freemavens; digital CX agency UDG, acquired last autumn; and innovation and strategy research firm The Forge, acquired in May. It employs around 1,850 people in 24 global offices.

S4 was formed in May 2018, after Sorrell left WPP under a cloud, and currently has two divisions, the dominant digital marketing unit and a relatively new Technology Services division. Its share price reached a high of £831 in September 2021, was down by around 85% in July 2022, 95% by January 2024 and 97.5% now, leaving the company with a market cap of about £137m. Revenue has fallen from £1.07bn in 2022 to £756.4, last year.

Web site: www.s4capital.com .