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MDC Partners and Stagwell Media LP have announced a definitive agreement to combine their businesses, creating a leading global integrated marketing services company. The merger is projected to enhance digital service contributions, with an expected 5%+ annual organic revenue growth and significant operational cost savings of approximately $30 million. Existing MDC shareholders will own 26% of the new entity while Stagwell will have a 74% share. The deal aims to leverage advanced technology and talent to meet modern marketing demands, with an expected completion in early 2021.
MDC Partners reported a third-quarter 2020 revenue of $283.4 million, showing a 17.3% decline year-over-year but a 9.1% sequential increase. Year-to-date revenue totaled $870.8 million, down 15.8%. Organic revenue dropped 16.4% in Q3 and 14.1% YTD, largely due to reduced client spending linked to COVID-19. The company achieved net income of $0.4 million this quarter, contrasting a net loss of $5.1 million in Q3 2019. Adjusted EBITDA rose 9.9% to $54.1 million with a margin of 19.1%. The potential merger with The Stagwell Group is under discussion but remains non-binding.
MDC Partners Inc. (NASDAQ: MDCA) is set to report its financial results for the three months ended September 30, 2020, on October 29, 2020, before market opening. A conference call will follow at 8:30 AM (ET) for discussions regarding the results. Interested parties can join by calling specified numbers or access a recording post-call. MDC Partners is a prominent marketing and communications network known for its innovative approaches, serving over 1,700 clients globally, leveraging technology and insights to enhance marketing effectiveness.
MDC Partners (NASDAQ: MDCA) has launched PRophet, the first AI-driven platform to predict media interest and sentiment before press releases. Utilizing natural language processing and machine learning, PRophet samples millions of stories to inform PR strategies. Developed within MDC's Ventures Inside program, the platform enhances the PR process by providing data-driven insights for pitching reporters. Key figures behind this innovation include Aaron Kwittken and Mark Penn, aiming to revolutionize how PR professionals engage with media.
MDC Partners Inc. (NASDAQ: MDCA) announced progress in its discussions with Stagwell Media LP for a potential business combination. The special committee of directors confirmed an agreement in principle on key aspects of the transaction, aiming to maximize shareholder value. The committee will proceed with confirmatory due diligence and negotiate definitive documentation. The agreement is non-binding and contingent on obtaining necessary consents. Additionally, MDC intends to withdraw its prior registration related to a change of incorporation jurisdiction, linking this decision to the potential transaction.
MDC Partners announced the establishment of a new division, the Global Technology Group, aimed at revolutionizing its technology infrastructure for enhanced collaboration. Led by John Georgatos, this initiative focuses on security, systems design, and cloud architecture. The Group is part of MDC's ongoing efforts to transform into a modern global marketing partner, preparing for a post-COVID-19 work environment. It will implement cloud investments, AI integration, and cybersecurity enhancements to support a seamless work experience across its network.
MDC Partners Inc. (NASDAQ: MDCA) announced on Aug. 31, 2020, the filing of a registration statement with the SEC for a proposed change of incorporation from Canada to Delaware. The move aims to reflect the Company’s U.S.-focused operations and simplify its organizational structure, potentially attracting more investors. A special shareholder meeting will follow SEC clearance for approval. CFO Frank Lanuto emphasized that this change could reduce administrative costs and enhance appeal for U.S.-domiciled investment opportunities.
MDC Partners Inc. announced that its Chairman and CEO, Mark Penn, along with CFO Frank Lanuto, will participate in a fireside chat at the BMO 2020 Virtual Technology Summit on August 25, 2020, at 2 PM ET. A live audio webcast of this event will be accessible to the public through the Investors section of the MDC Partners website. The archive of the presentation will be available for a limited time.
KWT Global and HL Group have been appointed to manage public relations for the telehealth platform Hims & Hers, effective July 2020. The agency will support existing health products and new launches while promoting awareness for telemedicine services. Hims & Hers aims to expand healthcare access, recently adding mental health services amid the COVID-19 pandemic. Co-Founder Hilary Coles emphasized the growing importance of accessible healthcare. The partnership aims to enhance market reach, joining a roster of notable consumer brands.
MDC Partners reported second quarter 2020 revenue of $259.7 million, down 28.3% year-over-year, and $587.4 million year-to-date, a decline of 15.0%. The company experienced a net loss of $4.1 million for the quarter compared to a profit of $0.8 million in 2019, largely due to non-cash impairment charges. Adjusted EBITDA fell 22.1% to $36.2 million while margin improved to 13.9%. Despite declines, MDC maintained a positive cash position of $23 million and reduced leverage to 4.6x. The company is not providing 2020 revenue guidance due to COVID-19 uncertainties.
