S4 Capital, Sir Martin Sorrell’s investment vehicle, is growing headcount at MediaMonks by a fifth with the acquisition of nine-year-old US agency Firewood.
Firewood offers digital marketing services including creative, strategy and planning, performance media and technology.
S4 is paying $112.5m (£91.7m) on completion, half in cash and half in S4 ordinary shares, with a further payment of $37.5m (£30.6m) on publication of Firewood's accounts for 2019, if budgeted Ebitda is reached. It is being funded from a capital raise of £100m announced by S4 this morning (Tuesday).
Firewood was founded by Lanya and Juan Zambrano in Silicon Valley and has expanded in the US 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".
Sorrell said: "Firewood has an enviable client list comprising many of Silicon Valley’s finest. 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".
Juan Zambrano, Firewood’s chief executive, added: "We came from the client world and had a very different and non-agency mindset. 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 is now more than 1,800. Wesley ter Haar, chief operating officer at MediaMonks, said: "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."
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 managing director Emmet McCaughey.
Revenues at Firewood are targeted to reach $73m (£59.5m) in 2019, up by more than 30% on 2018.