MDC's Stake in Crispin Valued at $300 Million

Shop Adds to Holding Company's Coffers -- and Could Help Drive Share Price

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NEW YORK ( -- The tale of Crispin Porter & Bogusky and its owner, MDC Partners, could be one where a part is worth more than the whole -- right now, anyway.

New research posits that MDC's ownership stake in Crispin -- boosted to 77% earlier this month -- is now worth around $300 million. By comparison, MDC's market capitalization today is only $250 million. "At some point, we believe MDCA may consider highlighting the value of its stake in CPB," writes RBC Capital Markets in a new analyst report that initiates the bank's coverage of the stock.

Revenue generator
As with any valuation (cough, Facebook, cough), you have to take this with a grain of salt. And, of course, if MDC gets its stock moving everything will change. Having that greater chunk of Crispin is sure to help that effort. Crispin, which counts Burger King, Domino's Pizza, Nike and Volkswagen among its clients, is expected to generate more than $135 million in revenue in 2008, with about $30 million in pre-tax profit.

In any event, RBC's analysis shows just what a power -- a profitable power -- Crispin remains several years after it rose to national prominence.

Toronto-based MDC, which previously had a 49% stake in Crispin, has the option of buying another 17% stake in 2010 (bringing ownership to 94%) and the remaining 6% by 2012, RBC's research report says.

Ups stake in Kirshenbaum Bond
MDC this year also bought the remaining 40% of Kirshenbaum Bond & Partners, and full ownership in the agency is estimated to be worth about $140 million. Revenue at Kirshenbaum Bond (current accounts include BMW, Diageo, Panasonic and Wendy's brands), meanwhile, is estimated to total around $55 million for 2007, RBC said.

MDC, which first began acquiring U.S.-based advertising agencies in 1998 and currently has 40 agency brands under its umbrella, at the end of 2006 ranked as the 11th-largest advertising services company in the world; RBC said it expects MDC to move into the top 10 for 2007, reporting more than $525 million in revenue.
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