MDC Partners (MDCA) Shareholders Approve Business Combination with Stagwell

Rhea-AI Summary

MDC Partners Inc. (NASDAQ: MDCA) announced that its shareholders have voted to approve the business combination with Stagwell Media LP. The transaction is expected to close around August 2, 2021, resulting in the new company being named Stagwell Inc.. This significant move positions the combined entity to enhance its presence in the digital marketing and advertising sectors, leveraging nearly 10,000 employees for innovation and growth. Leaders from both companies express optimism about creating a powerful marketing platform for clients worldwide.

Positive

• Shareholders approved the business combination with Stagwell, signaling strong support for the merger.
• The transaction positions MDC for leadership in rapidly growing segments of digital marketing and advertising.
• The combined company will leverage nearly 10,000 employees to enhance service offerings and client experiences.

Negative

• Potential adverse tax consequences related to the transaction could impact MDC and shareholders.
• Uncertainty surrounding the transaction may affect business operations for both MDC and Stagwell.
• There is a risk that conditions for the completion of the transaction may not be satisfied.

Shareholders Vote to Approve Proposed Business Combination with Stagwell

Resolution Approval Positions MDC to Become a Leader in Some of the Fastest-Growing Segments of the Digital Marketing and Advertising Sector

Following Close, Newly Combined Company Will be Renamed Stagwell Inc.

NEW YORK, July 26, 2021 /PRNewswire/ -- (NASDAQ: MDCA) – MDC Partners Inc. ("MDC Partners", "MDC" or the "Company") announced today that MDC shareholders voted to approve the previously announced business combination (the "Transaction") of MDC with certain subsidiaries of Stagwell Media LP ("Stagwell"), during a special meeting of shareholders held earlier today. Following the close of the Transaction, the combined company will be renamed Stagwell Inc, and will be traded on the NASDAQ Stock Exchange. The Company currently anticipates that the Transaction will be completed on or around August 2, 2021. The final vote results will be filed on a Form 8-K with the Securities and Exchange Commission.

Mark Penn, Chairman and CEO of MDC Partners and Managing Partner of the Stagwell Group said, "On behalf of our Board and management team, I would like to thank our shareholders for their approval of the combination with Stagwell and for recognizing this was a unique opportunity to create a new marketing machine that can transform the industry and create enhanced opportunities for growth and value in the marketplace. The combined company's nearly 10,000 employees will bring together the best in creativity globally with new, connected experiences to serve our clients effectively. The long wait is over, and we are ready to move forward together."

Irwin D. Simon, Lead Independent Director & Chair of the MDC Partners Special Committee commented, "We are pleased with the outcome of today's Special Meeting and want to thank all MDC shareholders for their support of the combination with Stagwell. The recent constructive dialogue amongst all parties helped us reach a deal that is in the best interests of MDC shareholders and leaves the combined company well positioned to create growth and cash flow, while generating value for all MDC shareholders."

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communications networks in the world. As "The Place Where Great Talent Lives," MDC Partners is celebrated for its innovative advertising, public relations, branding, digital, social and event marketing agency partners, which are responsible for some of the most memorable and effective campaigns for the world's most respected brands. By leveraging technology, data analytics, insights and strategic consulting solutions, MDC Partners drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at mdc-partners.com, sign up for investor-related updates and alerts, and follow us on LinkedIn.

Cautionary Statement Regarding Forward-Looking Statements

This communication may contain certain forward-looking statements (collectively, "forward-looking statements"). Statements in this document that are not historical facts, including statements about MDC's or Stagwell's beliefs and expectations and recent business and economic trends, constitute forward-looking statements. Words such as "estimate," "project," "target," "predict," "believe," "expect," "anticipate," "potential," "create," "intend," "could," "should," "would," "may," "foresee," "plan," "will," "guidance," "look," "outlook," "future," "assume," "forecast," "focus," "continue," or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section. Such forward-looking statements may include, but are not limited to, statements related to: future financial performance and the future prospects of the respective businesses and operations of Stagwell, MDC and the combined company; information concerning the Transaction; the anticipated benefits of the Transaction; the likelihood of the Transaction being completed; the anticipated outcome of the Transaction; the tax impact of the Transaction on MDC and shareholders of MDC; the timing of the shareholder meeting to approve the Transaction (the "Special Meeting"); the shareholder approvals required for the Transaction; regulatory and stock exchange approval of the Transaction; and the timing of the implementation of the Transaction. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement, including the risks identified in our filings with the SEC.

These forward-looking statements are subject to various risks and uncertainties, many of which are outside MDC's control. Important factors that could cause actual results and expectations to differ materially from those indicated by such forward-looking statements include, without limitation, the risks and uncertainties set forth under the section entitled "Risk Factors" in the registration statement on Form S-4 filed on February 8, 2021, and as amended on March 29, 2021, April 21, 2021 and April 30, 2021 (the "Form S-4"), under the section entitled "Risk Factors" in the proxy statement/prospectus on Form 424B3 filed on May 10, 2021, as supplemented on July 12, 2021 and July 19, 2021 (together with the Form S-4, the "Proxy Statement/Prospectus"), under the caption "Risk Factors" in MDC's Annual Report on Form 10-K for the year-ended December 31, 2020 under Item 1A and under the caption "Risk Factors" in MDC's Quarterly Report on Form 10-Q for the quarter-ended March 31, 2021 under Item 1A. These and other risk factors include, but are not limited to, the following:

• an inability to realize expected benefits of the Transaction or the occurrence of difficulties in connection with the Transaction;
• adverse tax consequences in connection with the Transaction for MDC, its operations and its shareholders, that may differ from the expectations of MDC or Stagwell, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on MDC's determination of value and computations of its tax attributes may result in increased tax costs;
• the occurrence of material Canadian federal income tax (including material "emigration tax") as a result of the Transaction;
• the impact of uncertainty associated with the Transaction on Stagwell's and MDC's respective businesses;
• direct or indirect costs associated with the Transaction, which could be greater than expected;
• the risk that a condition to completion of the Transaction may not be satisfied and the Transaction may not be completed; and
• the risk of parties challenging the Transaction or the impact of the Transaction on MDC's debt arrangements.

You can obtain copies of MDC's filings under its profile on SEDAR at www.sedar.com, its profile on the SEC's website at www.sec.gov or its website at www.mdc-partners.com. MDC does not undertake any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.

 

 

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SOURCE MDC Partners Inc.

FAQ

What was the outcome of MDC Partners' shareholder meeting on July 26, 2021?

MDC Partners' shareholders voted to approve the business combination with Stagwell Media LP.

When is the expected completion date for the MDC and Stagwell business combination?

The transaction is expected to be completed on or around August 2, 2021.

What will MDC be renamed after the business combination?

After the merger, the combined company will be renamed Stagwell Inc.

How many employees will the combined company have after the transaction?

The combined company will have nearly 10,000 employees.

What are the potential risks associated with the MDC and Stagwell merger?

Potential risks include adverse tax consequences, uncertainty affecting operations, and the possibility that conditions for completion may not be met.