Stagwell’s majority pro forma ownership ensures aligned incentives for all shareholders. Mark Penn — chairman and CEO of MDC Partners — joins Yahoo Finance Live to discuss MDC’s recent merger with Stagwell Group, as well as his insights on the current state of politics and … Key digital assets include Code and Theory, ForwardPMX, Harris and National Research Group. Seth Klarman is one of the world’s most successful value investors. 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Under Stagwell’s merger scheme, Stagwell would trade Stagwell’s existing agency holdings for MDC shares, creating a $2 billion revenue agency company. Are you a print subscriber? The companies said a management team for the merged company would be formed and “consist of existing executives from both MDC and Stagwell.”, “This is a new day for MDC and Stagwell,” Penn said in a statement. Stagwell is the owner of companies like creative consultancy Wolfgang; digital creative shop Code and Theory; communications firm Sloan and Co.; and digital agency Targeted Victory. Goldman Sachs, an existing MDC investor, would continue to hold preference shares, though MDC and the investment bank agreed to renegotiate terms of those shares as part of the merger transaction. NewCo: 2021PF: ~$2.1BN of revs, $355-370MM (including $30MM of 3-year cost synergies, 90% captured by year two). Stagwell and MDC said the merged business would have estimated 2020 worldwide pro forma revenue of $2.065 billion to $2.075 billion. Existing MDCA shareholders (including Stagwell) will receive 26% of the common equity of the combined company. MDCA Partners January 2020 Memo: Merger With Stagwell, Please speak to a licensed financial professional, MDCA Partners January 2020 Memo: Merger With Stagwell [Valuation Analysis], Possible timelines for third coronavirus stimulus checks, 2020 Economic Growth Was The Worst Since World War II, How much of a down payment do you need? Stagwell Group organic revenue spikes 59.9% in Q4. Advertising company MDC Partners and marketing network Stagwell Group agreed to merge this month, forming one of the top 10 advertising holding companies. We think that in the short term MDCA shares are worth $4.50-5.00 (~60%-80% higher). Since his tenure as CEO of MDCA, Penn has taken meaningful structural costs ($40MM+ on EBITDA of ~$180-190MM) out of the business through real estate and G&A rationalization while refocusing the business by cross pollinating assets and leveraging internal resources that resulted in MDCA winning several significant new advertising mandates (Audi, BMW, Coca Cola, Budweiser, J&J consumer, Nike, etc). Margin estimates are in line with near term projections and industry peers. Rev split: 42% digital services, 40% marketing communications, 13% research and insights, 5% content and media. MDCA Partners Inc. (“MDCA” or the “Company”) has been written up in the past which provides some good background of the Company. Acceleration of top line growth should give way to multiple rerating. Stagwell would control the merged venture, but more than half of revenue and employees would come from MDC. If the deal goes through, Stagwell would end up with about 79% of common equity of the combined company (assuming no conversion of outstanding so-called preference shares of MDC). - 1 week 2 days ago, By Stagwell’s prerogative however is not to manage this closely held like a PE firm but to serve as a platform operating company and will provide. MDC shareholders will receive 26% of the combined company’s common equity as part of the merger. var r = Math.floor(Math.random() * (9999 - 0 + 1) + 0); Penn's Stagwell Group Proposes Merger with MDC June 26 2020 The Stagwell Group, owner of the Harris and Harris Poll brands, has proposed a merger with marcoms group MDC Partners, … Stagwell proposes merger with MDC Partners. Stagwell Group, which has a pending merger agreement with MDC Partners, has revealed "material weaknesses in Stagwell’s internal control over financial reporting." This write up will detail the proposed transaction and provide a valuation framework that we feel justifies a value for MDCA that is significantly higher than where the stock is currently trading ($2.75). by Aleda Stam. The 8,675-person combined company would span 23 countries, managing $4.4 billion in media spend. Mgmt. ValueWalk also contains archives of famous investors, and features many investor resource pages. This write up focuses on the proposed merger of MDCA with The Stagwell Group LLC (“Stagwell”), a digitally focused holding company of marketing companies which also was the largest owner of MDCA shares prior to the proposed combination. Increased investor awareness, better understanding of higher growth heretofore private Stagwell assets, sell side coverage (numerous analysts covered MDCA pre-2019), analyst day, etc. In early 2019, Penn made a $100MM investment in MDCA through Stagwell and assumed the role of CEO. The Firm’s most common … thinks the combination could generate $90-150MM of incremental annual revs over time. December 21, 2020 MDC Partners and marketing consultancy Stagwell Group, both led by Mark Penn, have agreed to merge, according to the two companies. $2.0BN 2021E => 2025E $2.6BN (organic) + 75MM new digital rev streams, $325MM M&A growth = $3BN of total revenues. © 2011-2021 VALUEWALK LLC. MDC, with 2019 worldwide revenue of $1.4 billion, ranked as the world’s 15th largest agency company in 2019, according to Ad Age Datacenter. With the stock down to a low at $1.10 at the end of June 2020, Stagwell proposed an offer to combine with MDCA offering an implied value of $4.25 a share for MDCA shareholders. 6. 2025E EBITDA: $510-570MM assuming margins of 17-19% (Rubicon Capital assumptions). Read more > December 22, 2020.
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