Toronto-based digital design and production company Jam3 is merging with MediaMonks in what the latter’s co-founder, Wesley ter Haar, is describing as a “superteam moment.”

Jam3 and MediaMonks both take similar approaches, incorporating new technology, media and digital platforms into their production work. As such, ter Haar says they have long competed for business, but are now joining forces at a time when clients are looking for more consolidation on the vendor front.

“It will allow us to really own a space and continue to be the best at what we are doing,” says Mark McQuillan, partner and managing director with Jam3. “Our clients wanted to give us more opportunity, but because we are relatively small, they couldn’t justify the risk. This merger signals that we have a deeper bench, and we’ll be able to meet our clients’ needs.”

The merger is part of a larger strategy by MediaMonks’ parent company, S4 Capital, to become a disruptive force in the industry.

“It fits perfectly with what we’ve been doing,” Sir Martin Sorrell, S4 Capital’s founder and executive chairman, tells strategy. Since leaving his post as CEO of WPP in 2018 and subsequently starting S4, Sorrell has been vocal about problems with the holding company model – namely that they “are really, increasingly vertical” and that “by increasing the power of the verticals, they prevent themselves from integrating,” which does not fit the purpose of many clients these days.

“We operate as one, unitary structure with no cross-charging across the group,” Sorrell says. In keeping with that unitary model, Jam3 will eventually unify fully with MediaMonks.

“We’re moving to a unitary brand because that’s the most disruptive thing we can do in our industry,” ter Haar says, though he adds the shift will take time, as the company puts a lot of effort into “organizational design around ownable spaces,” so that “companies maintain their culture, because that’s why we’re adding them.”

In addition to its Toronto home base, Jam3 has offices in Los Angeles and Amsterdam; after opening its own office in Toronto last summer, MediaMonks has a presence in all those cities. Jam3 also has an office in Montevideo, Uruguay, while MediaMonks has its Latin American HQ in Buenos Aires and a global experiential hub in São Paulo.

No job losses are anticipated as a result of the merger – in fact, according to McQuillan, Jam3 now has “confidence to grow even more quickly” with the backing of S4 Capital.

“We’ll be employing more people,” adds Sorrell. “As of Thursday morning, we’ll have 4,600 people. This time last year, we had 2,500.”

While the value of the merger could not be disclosed, Sorrell says the structure of the transaction is “half cash and half shares,” which he says reflects the confidence of Jam3’s leadership in S4’s “Amazonian” ambitions to disrupt the category.

“The owners, Mark and his colleagues at Jam3, are buying into what we’re doing,” says Sorrell. “They’re not selling out.”

The merger was announced alongside S4’s preliminary results for 2020. Revenue was £342.7 million, up 15.2% year-over-year on a like-for-like basis, in a year when most traditional holding companies have struggled to find a way back into the black amid client marketing cutbacks. While its capabilities in digital media played a role, the results were heavily attributed to S4’s content practice, which makes up roughly three quarters of its profit and was scaled up significantly in 2020 through a series of other mergers, resulting in attracting business from clients including Mondelez, Google, BMW and PayPal.

The plan for content looking forward, according to today’s investor presentation, is to continue building out content capabilities and integrating with data and media teams to “become a partner of record for brands and businesses that want to turn up seamlessly for their customers.”