Stagwell Inc. (STGW) Announces Offering of Senior Notes to Refinance Existing Debt

Rhea-AI Summary

Stagwell Inc. (STGW) announced a proposed offering of senior unsecured notes through its subsidiary Midas OpCo Holdings LLC. The offering aims to redeem $870.3 million in existing senior notes, including interest and related expenses. The exact size and terms of the offering depend on market conditions. The proceeds from the offering will also be used to reduce credit facility borrowings and for general corporate purposes. The notes will be privately offered to qualified institutional buyers and non-U.S. persons, exempt from registration under U.S. securities laws.

Positive

• Intended use of proceeds includes redeeming $870.3 million in existing senior notes, potentially reducing interest expenses.
• Additional funds will be allocated to reduce credit facility borrowings, improving liquidity.

Negative

• Proposed offering may dilute existing shareholders if new notes adversely affect stock price.
• The success of the offering is not guaranteed, creating uncertainty for investors.

NEW YORK, Aug. 10, 2021 /PRNewswire/ -- (NASDAQ:STGW) -- Stagwell Inc. ("Stagwell") today announced a proposed offering (the "Offering") by its subsidiary Midas OpCo Holdings LLC (the "Issuer") of senior unsecured notes (the "Notes"). The Notes will be guaranteed by all of Stagwell's domestic subsidiaries that guarantee the Issuer's amended and restated $500 million senior secured revolving credit facility. The precise timing, size and terms of the Offering are subject to market conditions and other factors. No assurance can be made that the Offering will be consummated on its proposed terms or at all.

The Issuer intends to use the net proceeds from the Offering to redeem all $870.3 million aggregate principal amount of its outstanding 7.50% Senior Notes due 2024 (the "Existing Notes"), including accrued interest, related premiums, fees and expenses, to reduce credit facility borrowings and for general corporate purposes.

The Notes and the related note guarantees will be offered in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes and the related note guarantees have not been, and will not be, registered under the Securities Act or any state securities laws. The Notes and the related note guarantees may not be offered or sold in the United States or to, or for the benefit of, U.S. persons absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful. Any offers of the Notes will be made only by means of a private offering circular. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Stagwell Inc.

Stagwell is the challenger holding company built to transform marketing. Stagwell delivers scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, Stagwell's 12,000+ specialists in 30+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients.

Forward-Looking Statements

This communication may contain certain forward-looking statements (collectively, "forward-looking statements") within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended and Section 21E of the U.S. Exchange Act and the United States Private Securities Litigation Reform Act of 1995, as amended. Statements in this document that are not historical facts, including statements about 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. Such forward-looking statements may include, but are not limited to, statements related to future financial performance and the future prospects of the business and operations of Stagwell. 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 Securities Exchange Commission (the "SEC").

These forward-looking statements are subject to various risks and uncertainties, many of which are outside Stagwell'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 caption "Risk Factors" in Stagwell's Annual Report on Form 10-K for the year-ended December 31, 2020 under Item 1A and under the caption "Risk Factors" in Stagwell's Quarterly Report on Form 10-Q for the quarter-ended June 30, 2021 under Item 1A. Unless required by law, Stagwell undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

Contact:
Michaela Pewarski
michaela.pewarski@stagwellglobal.com 
646-429-1812

 

 

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SOURCE Stagwell Inc.

FAQ

What is the purpose of Stagwell Inc.'s offering of senior notes?

Stagwell Inc. intends to use the proceeds to redeem existing senior notes totaling $870.3 million, reduce credit facility borrowings, and for general corporate purposes.

When was Stagwell Inc.'s announcement regarding the offering made?

The announcement was made on August 10, 2021.

What is the financial impact of the senior notes offering on Stagwell Inc.?

The offering aims to reduce interest expenses by redeeming existing senior notes, but it may also lead to dilution for existing shareholders.

Is the offering of senior notes by Stagwell Inc. registered with the SEC?

No, the notes will be offered privately and have not been registered under the Securities Act.

What are the risks associated with Stagwell Inc.'s proposed senior notes offering?

The risks include the uncertainty of the offering's success and potential dilution of existing shareholder value.