11th August 2025
Barry Dudley of Green Square dissects the fledgling talks between S4 Capital and MSQ Partners, exploring strategic fit, the market forces driving the potential deal and what it could mean for Sir Martin Sorrell’s “new-age” marketing group after a turbulent few years.
S4 Capital, Sir Martin Sorrell’s ‘new-age’ digital marketing group, has confirmed that it is in very preliminary deal talks with MSQ Partners, the creative and technology agency network that is majority-owned by US private equity firm One Equity Partners (OEP).
The potential deal – which S4 says would be structured as an acquisition of MSQ by S4 Capital rather than a takeover of S4 – comes after a bruising period for the group. S4’s share price has fallen more than 90% from its peak only a few years ago. The current market capitalization sits at around £140m, a fraction of the multibillion pound valuation it once enjoyed.
I’ve heard rumors and seen reports of other interested parties in the past, including the likes of Stagwell, New Mountain Capital and Accenture. I suspect Sir Martin has had many conversations come at him, or indeed he has sought them. Probably even more are incoming right now.
Two different growth stories
S4 Capital was founded in 2018 after Sorrell’s high-profile exit from WPP. Built on aggressive M&A, it focused on digital content production, programmatic advertising and data-driven marketing through acquisitions such as MediaMonks and MightyHive. Its client base reads like a tech-sector who’s-who: Alphabet, Amazon, Meta to name just a few.
However, that narrow tech focus has been a double-edged sword. When the sector tightened budgets and many reallocated spend towards AI investments, S4’s revenues took a hit – compounded by accounting missteps, economic headwinds and rising interest rates.
MSQ Partners, on the other hand, offers a broader spread of clients – more than 250, including Unilever, Haleon, Lego, P&G and Booking.com – across consumer goods, healthcare, financial services and B2B. It operates through a decentralized network of specialist agencies spanning advertising, PR, design, digital, and tech.
Since being acquired by OEP in 2023, MSQ has invested in integrated, creative-plus-tech delivery models. We recently advised Precious Media, a connected commerce digital agency, on its sale to MSQ.
So how could they fit:
Complementary client bases – S4 is over-indexed to tech; MSQ brings balance through FMCG, healthcare, and finance.
Capability cross-sell – MSQ’s creative brand-building could bolster S4’s digital execution; S4’s programmatic and data expertise could sharpen MSQ’s digital performance offering.
Geographic scale – S4’s US and APAC strength could mesh with MSQ’s European roots, giving a broader footprint without heavy duplication.
AI positioning – Both have leaned into AI narratives, but a combined group could pool their R&D resources.
Market backdrop
The marketing services sector is undergoing its biggest structural shift since the holding-company era of the 80s and 90s. AI is reshaping creative workflows, media buying and data analytics. Clients are consolidating their agency rosters, looking for faster, integrated delivery.
The network groups have been re-engineering their own businesses to face this new way of working, with WPP recently merging its media offer under one brand. All are focussed on, and investing in, AI to help them deliver across media, creative and processes. But these are big legacy firms… and big ships can find it notoriously difficult to change course quickly.
This has created fertile ground for private equity–backed roll-ups and mergers of complementary mid-scale networks. We’ve seen a plethora of PE firms coming into the market and appetite isn’t abating. For OEP, combining MSQ with S4 could create another top-tier independent rival, not only to snap at the heels of the mega groups, but also some of the smaller challenger brands and the other PE-backed indies. It could also give MSQ more muscle in terms of its own future expansion, both geographically and in terms of capability infills it may need.
Fascinating unknowns
Will OEP take it off the stock market? I suspect it will, not least because it removes that historical peak – which was arguably a significant over-valuation – which will otherwise be a benchmark that continues to be referenced under the current listing. That said, maintaining the listing could open up other options in terms of financing future acquisitions.
And where will Sir Martin end up if this goes through? His voting control and personal stake mean no deal happens without him seeing a clear path for himself. Wherever things go, he looks set for another defining chapter in his career. Or will he head for the beach, which is where I am right now…