Martin Sorrell is taking control of an investment vehicle to build a new communications company just six weeks after stepping down as the boss of WPP, the world's biggest advertising group.
Sorrell has agreed to sell his newly incorporated company, S4, to Derriston Capital, which floated in late 2016 to make acquisitions in medical technology and later broadened its scope to take in the wider technology industry.
The deal is a reverse takeover, echoing Sorrell's strategy when he founded WPP in 1985. Then he used his own money to take control of a maker of wire baskets and turn it into a £16bn global advertising group through acquisitions. Derriston will change its name to S4 Capital and its board will resign with Sorrell taking over as executive chairman.
S4 has raised £51m of funds, including £40m from Sorrell, and has non-binding letters of support from institutional investors to provide more than £150m of equity to support acquisitions. Derriston's shares
have been suspended.
Sorrell, who is 73, left WPP on 16 April as the company investigated allegations of misconduct that he denied. The company said no material sums of money were involved and declined to give details of the allegations.
Sorrell told WPP employees he quit because he had become a distraction and suggested he was in no mood to retire by signing off: "Good fortune and God speed to all of you ... now Back to the Future."
Announcing his new venture, Sorrell said: "S4 Capital is a company that aims to build a multi-national communication services business focused on growth. There are significant opportunities for development in technology, data and content. I look forward to making this happen."
His fellow directors at S4 are former investment bankers Rupert Faure Walker, 70, and Paul Roy, 71. Faure Walker advised Sorrell on some of WPP's biggest acquisitions, including Ogilvy & Mather and JWT in the 80s.
Sorrell, who was the longest-serving director in the FTSE 100, had been under pressure at WPP before the misconduct allegations arose. Some investors had questioned his dominance of the company and pay packages that made him more than £200m in the past five years.
Those questions became more intense as WPP posted a series of poor trading updates that some analysts said indicated the company was becoming irrelevant as advertising moves on to internet platforms. Sorrell blamed activist investors and short-term accounting for reduced advertising budgets at big clients and said the trend would reverse.