Accenture, S4 Capital and WPP vying for €300 million MediaMonks deal

The Dutch digital production studio MediaMonks is on the verge of being acquired. According to sources, Accenture Interactive – the digital marketing agency of consulting giant Accenture – is one of the firms willing to pay almost €300 million to scoop the digital consultancy.

MediaMonks has approximately 650 employees, based across offices in Hilversum (Netherlands; headquarters), London, Los Angeles, Sao Paolo and Shanghai. The company provides digital media and advertising productions for websites, campaigns and advertising channels, serving large corporates including the likes of Audi, Mercedes-Benz and Lego. 

After seventeen years of operating independently in the market, MediaMonks is now close to a change of ownership. According to the generally well-informed Financial Times, a bidding war has started between four parties: private equity firm S4 Capital, WPP, Inflexion and Accenture, which if successful, would integrated the firm into its Interactive practice. An interesting detail is that S4 Capital is led by advertising tycoon Martin Sorrell, who until not so long ago was the CEO of advertising giant WPP. Sorrell pumped £40 million of personal finances into S4 Capital, and has since launching also raised £51 million from institutional investors and £150 million from other lenders. 

The Brit led WPP for over three decades and turned the company into the largest advertising agency in the world. In April this year he stepped down under suspicions of ‘personal misconduct’. According to WPP, Sorrell allegedly exceeded the dividing line between business and private expenses, with one example cited by his previous employer being that he declared the costs of a prostitute as a business expense.

According to a banker close to the matter, the asking price for MediaMonks is around the €300 million mark. Although this is regarded as "overpriced" by analysts compared to average valuations in the market, there are however few companies in the digital production segment that match the quality and scale of MediaMonks. “This explains the great interest and price,” the banker, who wished to remain anonymous, told the Financial Times. Clarity Corporate Finance, a corporate finance agency with offices in London and Sydney, has been selected to lead the sales process – the consulting firm is in the process of preparing an auction with potential buyers to close the deal.

With the interest from the different players, MediaMonks is set to take an important strategic decision on its future. Should the agency join the largest advertising network in the world, or perhaps opt for the biggest disruptor to the traditional advertising industry: Accenture Interactive? Accenture's digital marketing agency has in the space of a few years become WPP's biggest competitor, particularly through a 'buy-and-build' strategy. Among the acquisitions closed are parties such as Karmarama (UK), 2nd Roads Reactive Media (Australia), Rothco (Ireland), Sinnerschrader and dgroup (Germany), MOBGEN (Netherlands), Chaotic Moon (United States) and IMJ Corporation (Japan). 

Joining S4 Capital would mean taking a leap into greenfield territory – MediaMonks would be the first agency in the network Sorrell wants to build. Keith Hunt of M&A firm Results International believes that Sorrell has a longlist of twenty to thirty companies in which he is interested. Inflexion is a British mid-market private equity firm with an existing footprint in the marketing and digital media landscape.