S4 Capital Buys Mexico City-Based Circus Marketing For MediaMonks

(Alliance News) - Advertising and marketing firm S4 Capital PLC on Wednesday said it has agreed to buy Mexico City-based data-driven content agency Circus Marketing, merging it with content arm MediaMonks.

S4 Capital didn't provide financial terms for the acquisition. However, it said the consideration for Circus Marketing will be just over half in cash and the remainder in S4 Capital shares.

It said the valuation for Circus Marketing is in line with S4 Capital's normal metrics of about 1 to 2 times revenue and 5 to 10 times earnings before interest, tax, depreciation and amortisation, saying Circus Marketing adds USD38 million in projected revenue and USD20 million in gross profit in 2019.

"The move will expand S4 Capital's content expertise and strengthen its presence in eight locations across the Americas, as well as add a new office in Spain," the company said, noting Circus Marketing has 350 staff.

S4 Capital, whose executive chair, Martin Sorrell, former head of WPP PLC, said with the merger it will further strengthen its content expertise and position in the Latin America region.

Circus counts Netflix Inc, Spotify Technology SA, Facebook Inc, Alphabet Inc's Google and others among the clients on its A-list roster, the company noted.

In April last year, S4 Capital's MightyHive programmatic business bought Brazilian-based programmatic consultancy firm ProgMedia.

Martin Sorrell, executive chair, said: "Circus also embraces our data-driven holy trinity model and embodies faster, better, cheaper or speed, quality and value. They are buying into our unitary model, combining seamlessly with our content and programmatic practices."

In a trading update, S4 Capital said that trading for the first 11 months and expectations for December continue in line with market expectations.

The company said like-for-like revenue and gross profit growth is expected to be "well in excess" of 40% and earnings before interest, tax, depreciation and amortization "improving significantly in the second half".

In November last year, the company had said its revenue for the three months to September 30 was up almost 54% year-on-year to GBP56.6 million and gross profit up 50% to GBP42.1 million.

Like-for-like, including-impact of mergers, asset purchase and in constant currency, revenue and gross profit were up 48% and over 44%, respectively.

S4 Capital shares were up 0.5% in London at 189.90 pence each on Wednesday.

By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com

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S4 Cap.