Sir Martin Sorrell will make his second acquisition since leaving advertising giant WPP as he takes over Mighty Hive, a day after his new outfit announced it was in advanced talks with the company.
S4 Capital, which was set up by Sorrell after he left the world's biggest advertising firm earlier this year, said it will buy the US marketing agency in a deal which values the company at $150m (£118m).
Earlier this year Sorrell beat his old company in the race to acquire Dutch agency Media Monks. Mighty Hive becomes his second deal so far.
“The peanut has now morphed into a coconut, and is growing and ripening,” Sorrell said.
The deal, which is expected to be completed on Christmas Eve, will be put to a vote at S4’s investor meeting on 20 December. Management has already secured the support of shareholders holding nearly 40 per cent of the stock.
It will in part be paid with shares in S4 Capital.
It is the first step that S4 Capital takes into digital media after it was founded by Sorrell, who left WPP, which he also set up, amid allegations of personal misconduct, which he denied.
Mighty Hive co-founders Pete Kim and Christopher Martin will join the board of Sorrell’s new company, and continue to run their old business.
They said: “We are excited about the opportunities ahead, but for now, you can expect business as usual.
“The company’s leadership will remain involved in the day-to-day operations of the company, and our services and approach are not changing.”