REG - S4 Capital PLC - Related Party Transactions related to S4S Ventures

S4 CapitalAnnouncement

18/05/2022 07:00

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RNS Number : 9075L  S4 Capital PLC  18 May 2022

18 May 2022

S4 Capital plc

("S(4)Capital", the "Company" or the "Group")

Related Party Transactions related to S4S Ventures

S(4)Capital plc (SFOR.L), the tech-led, new age/new era digital advertising
and marketing services company, announces the following details relating to
transactions related to the first close of S4S Ventures ("S4S Ventures") which
is structured as two new funds of up to, in aggregate, US$100 million. S4S
Ventures aims to invest in companies across five principal areas: Martech,
Adtech, Data Technology, Creative Technology, and Emerging Digital
Media/Content. It will focus on investments which capture opportunities
presented by the next wave of digital transformation in the marketing and
advertising sectors, primarily at early funding stages.

S4S Ventures is particularly interested in supporting companies providing
solutions for: (a) acceleration of programmatic advertising across Connected
TV, gaming and digital audio ecosystems, (b) data warehousing, ingestion and
analysis for the purposes of identity resolution, (c) transformation of
content development and underlying workflows, by leveraging cloud computing
and artificial intelligence infrastructure, (d) monetisation of metaverse
opportunities, through development of software tools to facilitate/enable
brand and creator participation, and (e) emerging digital media capturing the
attention of Generation Z.

S4S Ventures will invest globally, but with an emphasis on the US, Europe and
the Middle-East.

Structure

·    S4S Ventures comprises two funds: a Luxemburg limited partnership,
S4S Ventures SCSp-RAIF (the "Fund"), with S4S Ventures General Partner S.À
R.L., a Luxembourg company, as its general partner, and a Delaware limited
partnership, S4S Ventures LP (the "Delaware Fund"), with S4S Ventures General
Partner LLC, incorporated in Delaware, as its general partner.

·    S4S Ventures is led by Sanja Partalo, a highly experienced digital
industry specialist and investor who was formerly Global Head of Strategic
Development and Partnerships at WPP. S(4)Capital and Stanhope Capital
("Stanhope Capital") as founders of S4S Ventures act as part of the General
Partner, which is a 50/50 joint venture between the S(4)Capital group and
Stanhope Capital. Daniel Pinto, Sir Martin Sorrell and Scott Spirit also sit
on its investment committee. Founders and senior employees of Stanhope Capital
and S(4)Capital (but not S(4)Capital itself) are investing in S4S Ventures.

·    Ms. Partalo and the S4S Ventures team will benefit from the support
of the S(4)Capital network, with over 8,800 people operating from 33
countries, and from Stanhope Capital's established investment expertise and
track record in both private and public markets. S4S Ventures is uniquely
positioned to identify, source and help scale up the next generation of market
leaders in the industry.

·    A proportion of the carried interest from S4S Ventures has been
allocated to a group company of S(4)Capital.  It is anticipated that this
will be used to remunerate S(4)Capital's people who provide investment ideas
to S4S Ventures, and only residual value (if any) will be received by the
S(4)Capital group.

·    In connection with S4S Ventures, S(4)Capital and certain of its
directors have entered into a series of material related party transactions
under Disclosure Guidance and Transparency Rule 7.3 (the "Related Party
Transactions"). This announcement is made under and in compliance with
Disclosure Guidance and Transparency Rule 7.3.8.

Arrangements relating to the establishment of S4S Ventures

·    On 13 May 2022, S(4)Capital and Stanhope Capital entered into a joint
venture agreement in relation to S4S Ventures, pursuant to which the parties
agreed to formalise their joint venture by adopting and implementing their
agreed principle terms of the joint venture and S4S Ventures. Stanhope Capital
is a related party to S(4)Capital by virtue of Daniel Pinto (a director of
S(4)Capital) being the founder and Chief Executive Officer of Stanhope
Capital.

·    On 13 May 2022, S4 Capital 2 Limited (a wholly-owned subsidiary of
S(4)Capital), Portman Square General Partner S.À R.L. and S4S Ventures
General Partner S.À R.L., entered into a shareholders' agreement in relation
to S4S Ventures which governs the shareholders' joint ownership, management,
control and operation of S4S Ventures General Partner S.À R.L., their joint
management, control and operation of S4S Ventures General Partner LLC and
their respective rights and obligations as shareholders in S4S Ventures
General Partner S.À R.L.. Portman Square General Partner S.À R.L. is a
related party to S(4)Capital by virtue of Daniel Pinto (a director of
S(4)Capital) being the founder and Chief Executive Officer of Stanhope
Capital, the sole shareholder of Portman Square General Partner S.À R.L..

Director and senior management investments into S4S Ventures

Sir Martin Sorrell, Scott Spirit, Daniel Pinto, Sue Prevezer, Victor Knaap and
Wesley ter Haar have committed to invest, directly or through related
entities, US$9,350,000, in aggregate, into S4S Ventures, a related party of
S(4)Capital by virtue of (i) S(4)Capital being one of its General Partners and
(ii) Daniel Pinto (a director of S(4)Capital) being founder and Chief
Executive Officer of Stanhope Capital.

The directors of S(4)Capital independent of S4S Ventures consider the terms of
the Related Party Transactions to be fair and reasonable from the perspective
of S(4)Capital and its shareholders who are not a related party.

Enquiries

 S(4) Capital plc                               Tel: +44 (0)20 3793 0003
 Sir Martin Sorrell, Executive Chairman
 Powerscourt (PR adviser to S4Capital plc)      Tel: +44 (0)7786 702 526
 Robin O'Kelly
 Jane Glover

About S(4) Capital

S(4) Capital (SFOR.L) is the tech-led, new age/new era digital advertising
and marketing services company, established by Sir Martin Sorrell in May 2018.

Its strategy is to build a purely digital advertising and marketing services
business for global, multinational, regional, local clients and
millennial-driven influencer brands. This will be achieved by integrating
leading businesses in three practice areas: content, data&digital media
and technology services, along with an emphasis on "faster, better, cheaper"
executions in an always-on consumer-led environment, with a unitary structure.

Digital is by far the fastest-growing segment of the advertising market.
S(4)Capital estimates that in 2021 digital accounted for approximately 60% or
$420-450 billion of total global advertising spend of $700-750 billion
(excluding over $500 billion of trade promotion marketing, the primary target
of the Amazon advertising platform) and projects that by 2022 total global
advertising spend will expand to $770-850 billion and digital's share will
grow to approximately 65% and by 2024 to approximately 70%, accelerated by the
impact of covid-19.

In 2018, S(4)Capital combined with MediaMonks, the leading AdAge A-listed
creative digital content production company led by Victor Knaap and Wesley ter
Haar, and then with MightyHive, the market-leading digital media solutions
provider for future thinking marketers and agencies, led by Peter Kim and
Christopher S. Martin.

Since then, MediaMonks and MightyHive have combined with more than 25
companies across content, data&digital media and Technology services. For
a full list, please see the S(4)Capital website (https://www.s4capital.com/)
.

In August 2021, S(4)Capital launched its unitary brand by merging MediaMonks
and MightyHive into Media.Monks, represented by a dynamic logo mark that
features MightyHive's iconic hexagon. As the operational brand, Media.Monks
underpins S(4)Capital's agility, digital knowledge and efficiency and is the
next step in delivering on its foundational promise to unify content,
data&digital media and Technology services.

Victor Knaap, Wesley ter Haar, Pete Kim, Christopher Martin, Mary Basterfield
and Scott Spirit all joined the S(4)Capital Board as Directors.
The S4Capital Board also includes Rupert Faure Walker, Paul Roy, Daniel
Pinto, Sue Prevezer, Elizabeth Buchanan, Naoko Okumoto, Margaret Ma Connolly,
Peter Rademaker and Miles Young.

The Company now has over 8,800 people in 33 countries across the Americas,
Europe, the Middle East and Africa and Asia-Pacific and a current market
capitalisation of approximately £1.59 billion (c.$1.99 billion) and would
rank in the FTSE 200. It achieved Unicorn status in a little over one year,
unique in the advertising and marketing services industry. Sir Martin was CEO
of WPP for 33 years, building it from a £1 million "shell" company in 1985
into the world's largest advertising and marketing services company with a
market capitalisation of over £16 billion on the day he left. Today its
market capitalisation is £10.9 billion, dropping into third place behind both
Omnicom and Publicis for the first time ever. Prior to that Sir Martin was
Group Financial Director of Saatchi & Saatchi Company Plc for nine years.

 

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