S4 Capital PLC agreed to merge Dutch digital content unit MediaMonks BV with digital marketing agency Firewood Marketing Inc. for $150 million in a cash-and-stock transaction.
The price includes a cash payment of $77.5 million, with the remaining $72.5 million to be paid in 41,428,571 new ordinary shares. S4 Capital will pay $112.5 million upon deal completion, with an additional $37.5 million to be paid on publication of Firewood's 2019 accounts, subject to the latter meeting its EBITDA target.
To help fund the transaction's cash portion, S4 Capital intends to raise gross proceeds of about £100 million by issuing 70,422,535 new ordinary shares at £1.42 per share. The shares will be issued through a mix of a firm placing as well as a placing and open offer.
The share issuance is subject to approval by S4 Capital shareholders in an Oct. 24 meeting. The new shares are expected to be admitted for trading Oct. 25 on the London Stock Exchange. Firewood will become a wholly owned indirect subsidiary of S4 Capital following the admission of new shares.
San Francisco-based Firewood offers creative, strategy and planning, performance media and technology services to its clients using an embedded partnership model.
S4 Capital is a U.K. digital advertising and marketing services company founded by former WPP PLC CEO Martin Sorrell.
