S4 Capital is beefing up its new-era digital model with design and experience hotshop Jam3, which is merging with its creative arm MediaMonks in a cash-and-equity deal. This is the third major deal S4 has completed this year; in January, Decoded Advertising joined MediaMonks, and Metric Theory became a part of S4’s data and media consulting agency MightyHive.

S4 Executive Chairman Martin Sorrell declines to characterize the deal as an acquisition, saying instead that Jam3 is “buying into” the S4 model. According to S4, all of its deals are 50% cash and 50% stock. So under the pact Jam3, which is estimated to have $22 million in revenue last year, becomes a stakeholder in S4. Specific terms were not disclosed.

As is the case with earlier deals, Jam3 will become part of MediaMonks, operating under a single P&L. Jam3 will bring MediaMonks’ employee headcount up to 4,600 from 4,400.

Jam3 is known for creative storytelling through its innovative use of technology. The company first made a name for itself in 2012 with an interactive documentary that allowed viewers to immerse themselves into the life of a bear in a Canadian national park. More recently, Jam3 helped reimagine Complex’s Complexcon, digitally for a post-COVID world, and also helped Adidas create a “Newstand of the Future” pop-up shop in 2019.

Jam3 founder Mark McQuillan says the merger allows the agency to “focus on its strengths” rather than diversify to meet the needs of a changing marketplace. “When you get to our scale and work with these Fortune 500, global, multinational companies, they need those services we wouldn’t have been able to offer,” McQuillan says. “It would slow our growth and ultimately we didn’t want to do that.”

McQuillan says he and his partners spent a year looking for a partner and found one in MediaMonks, a constant competitor with which it shares a number of clients, including Facebook and Google. Wesley ter Haar, founder of MediaMonks, says that merging the two shops creates a “super team” of sorts.

“The work that the Jam and our team does is some of the most iconic digital work over the last decade,” ter Haar says. “This makes it easier for our clients; rather than putting us in competitive spaces, clients can put us into combined efforts.”

Sorrell says his “one firm” single P&L is a model clients demand—and one that the legacy holding companies fail to provide. “When we’re talking about being unitary, or one P&L, we don’t turn up to the pitch with the same T-shirt,” Sorrell said. “We are bringing companies together as one. Clients want us executing on the creation, production and distribution of content.”

The digital model that S4 espouses has helped it weather the pandemic, says Sorrell, who adds that both S4 and Jam3 “have sailed through the strain and challenge of pandemic and are probably strengthened.”

“Certainly the six holding companies have gone backwards and S4 and Jam are going forward,” says Sorrell, who rarely misses the chance to take a shot at holding companies. “We’re up 19% on year-over-year, like-for-like in gross profit at a time where most holding companies are down 5%-12%.”

S4 has a “20 square” objective to sign 20 “whoppers,” or accounts worth $20 million in annual revenue, like some of the agency’s current clients including Google, Netflix, Facebook, and BMW.

Sorrell says that while two-and-a-half-year-old S4 has grown significantly since its inception, it still isn’t where he expects it to be. “If you’re ambitious you never are [satisfied] and we’re very ambitious,” he says.