LONDON (Reuters) – Martin Sorrell’s S4 Capital (SFOR.L) has agreed to buy San Francisco-based programmatic ad firm MightyHive for an enterprise value of $150 million, funded by the issue of new shares worth 74 million pounds ($94 million).

Former WPP boss Sorrell said the deal marked an important second strategic step for his new company. “The peanut has now morphed into a coconut, and is growing and ripening,” he said with a typical flourish on Tuesday.

MightyHive uses algorithms to buy and sell advertising space online in real time.

Sorrell launched S4 Capital earlier this year shortly after he left WPP (WPP.L), the world’s biggest advertising group, over a complaint of personal misconduct, which he denied.

Sorrell beat his old firm in July to buy Dutch digital agency MediaMonks, agreeing to pay 300 million euros for a digital agency that creates content and campaigns for clients including Adidas, Amazon, Google, Netflix and Hyundai.

Adding MightyHive’s programmatic capabilities to MediaMonk’s creative offer would enable S4 to offer clients fully integrated purely digital marketing, he said.

The new capital raising is led by Stanhope Capital, which will be a long-term strategic partner, S4 said.

Daniel Pinto, Stanhope Capital’s founder and chief executive who will join S4’s board, said combining Sorrell’s experience and connections with the latest in ad technology was a compelling investment opportunity.

“When you look at the big advertising groups, it is very clear that they are behind the curve in terms of digital strategy,” he said in a telephone interview on Tuesday.

“(Sorrell’s) strategy is to create a pure play in the world of digital media and advertising (…) and having been on the other side, he knows exactly how to grow a business like that.”

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