Sorrell confirms adland return with 'tech, data and content'-focused S4 Capital

The former WPP chief executive, who left the holding group in April, yesterday announced to the stock market the acquisition of S4 Capital, a newly set up company, by publicly-listed firm Derriston Capital.

Sorrell had dismissed earlier reports about the move as "market speculation".

The new organisation will be renamed S4 Capital, with the intention of exploiting "significant opportunities" in technology, data and content, according to a statement to the market.

S4 Capital said it is already in "preliminary discussions" regarding potential acquisitions.

Sorrell, who becomes executive chairman of the London-listed company, has contributed £40m to the launch of S4 Capital, with a further £11m coming from institutional and other investors. The firm recently completed a £51m equity fund raise, and has received non-binding letters of support for more than £150m in further funds.

Alongside Sorrell, Sky Bet chairman Paul Roy and former HSBC Investment Bank managing director Rupert Faure Walker have joined the business as non-executive directors.

"S4 Capital is a company that aims to build a multinational communication services business focused on growth. There are significant opportunities for development in technology, data and content. I look forward to making this happen," Sorrell said.

The method of launch – by seizing control of a publicly-listed firm and using it as a shell for acquisition – closely follows the approach used by Sorrell to acquire and develop WPP as an advertising holding company. 

Sorrell has been allowed to launch S4 Capital as he did not have a non-compete clause in his contract at WPP.