| Revenue ($ in millions) | 2021 | 2020 | % chg |
| Worldwide | $2,224.3 | $2,087.0 | 6.6 |
| U.S. | $1,828.9 | $1,764.1 | 3.7 |
| Non-U.S. | $395.4 | $323.0 | 22.4 |
| Ticker: STGW (Nasdaq) |
Asterisk (*) indicates figures are Ad Age estimates.
Fast facts: Overview:
Stagwell Inc. is an agency company based in New York.
The company took its current form in August 2021 when MDC Partners, an agency company, combined with The Stagwell Group, which had holdings in new media and digital marketing services. At that point, MDC changed its name to Stagwell Inc.
Worldwide revenue shown for 2021 and 2020 is stated pro forma revenue, including the former MDC and Stagwell. The U.S. and non-U.S. pro forma revenue figures shown are Ad Age Datacenter estimates.
Business segments and operations:
Stagwell's 10-K filing said no client accounted for more than 7% of revenue in 2021 or 2020.
Stagwell said its 10 largest clients (by revenue) accounted for about 17% of worldwide revenue in 2021; and 35% in 2020.
Stagwell's 10-K for year ended December 2021 said: "Historically, client concentration increases during election years due to the cyclical nature of our advocacy Agencies which are Targeted Victory and SKDK (including Sloane & Company)."
MDC Partners (legacy):
MDC's 10-K filings said no client accounted for more than 5% of revenue in 2020, 2019, 2018, 2017, 2016, 2015 or 2014.
MDC's 10-K for year ended December 2015 said no client accounted for more than 5% of revenue in 2015, 2014 or (based on restated revenue) 2013.
Earlier MDC 10-Ks show MDC generated about 5% of 2013 and 2012 revenue from its largest client, U.S. telecom firm Sprint; 6% in 2011; 8% in 2010; 16% in 2009; 19% in 2008; and 17% in 2007. Then-CFO David Doft said at an investor conference in October 2012 that MDC has had a relationship with Sprint "for almost 20 years." (T-Mobile in 2020 bought Sprint.)
MDC said its 10 largest clients (by revenue) accounted for about 21% of worldwide revenue in 2020; 23% in 2019, 2018, 2017 and 2016; 24% in 2015 and 2014; 27% in 2013; 26% in 2012; 29% in 2011; 37% in 2010; 49% in 2009; and 45% in 2008.
Deals and strategic moves:
MDC/Stagwell merger (2021):
Stagwell Inc. was formed Aug. 2, 2021, through a merger of Stagwell Marketing Group and MDC Partners. Upon completion of the merger, Stagwell took control of MDC through a reverse merger. At that point, MDC changed its name to Stagwell Inc. (Nasdaq: STGW).
Before the merger, Stagwell (operating as The Stagwell Group) had been MDC's largest shareholder.
MDC was the parent of agencies including Anomaly, CPB, Doner and 72andSunny.
The Stagwell Group's holdings included digital creative shop Code and Theory; communications firm Sloane & Co.; digital agency Targeted Victory; and creative consultancy Wolfgang.
MDC's board in December 2020 approved a merger agreement with Stagwell in which existing MDC common shareholders (including Stagwell) would end up with about 26% of the common equity of the combined company (excluding the effect of converting outstanding MDC preference shares into common stock). This came after Stagwell in June 2020 first proposed a merger. In the face of pressure from MDC shareholders, Stagwell improved its proposed offer in a series of revisions in 2021. MDC shareholders in July 2021 approved the transaction under revised terms.
Existing MDC common shareholders (including Stagwell) ended up with about 31% of the common equity of the combined company immediately following the closing of the transaction in August 2021 (excluding the effect of converting outstanding MDC preference shares into common stock).
In the merger with MDC, Stagwell Media LP contributed its interest in Stagwell Marketing Group LLC to the merged company.
Stagwell Media received about 69% of voting rights in the combined company (excluding Stagwell's ownership in the combined company derived from its ownership of MDC shares before the merger and excluding the effect of converting outstanding MDC preference shares into common stock) for contributing its businesses in return for newly issued MDC shares.
As of Feb. 28, 2022, Stagwell Media beneficially owned approximately 65% of Stagwell Inc.'s outstanding shares of Class A common stock on an as-converted basis, according to Stagwell Inc.'s 10-K filing.
The Stagwell Group as of April 2021 had an 18.6% stake in MDC, according to MDC's proxy statement. Stagwell first invested in MDC in March 2019, when Stagwell Media invested $100 million in MDC by purchasing $50 million in MDC common shares and $50 million in non-voting convertible preference shares. As part of the deal, Mark Penn, Stagwell's managing partner, joined MDC as CEO and a board member.
Stagwell's initial investment came after MDC in September 2018 announced the planned exit of Chairman-CEO Scott Kauffman; a search for a new CEO; and MDC's "intention to explore and evaluate potential strategic alternatives, which may result in, among other things, the possible sale of the company." In announcing the 2019 deal with Stagwell, MDC said: "This represents the conclusion of the strategic review process and CEO search."
Other deals and strategic moves:
Stagwell in April 2022 bought Brand New Galaxy, a provider of commerce and marketplace solutions for brands and e-commerce retailers. Brand New Galaxy joined Stagwell Media Network. At the time of the acquisition, Brand New Galaxy had more than 600 employees in Europe, North America and the Middle East. Brand New Galaxy was founded in Warsaw, Poland, in 2017.
Stagwell in April 2022 bought Dyversity Communications, a multicultural full-service marketing agency in Canada. Dyversity specialized in Chinese and South Asian communications, with additional expertise in more than 20 other languages including Filipino, Korean, Portuguese and Spanish. Dyversity, which had more than 30 employees at the time of the acquisition, became part of Doner Partners Network.
Stagwell in December 2021 bought Goodstuff, a full-service media planning and buying agency based in London, for 21 million pounds (about $28.1 million) in cash plus contingent consideration up to a maximum of 22 million pounds (about $29.7 million). This was Stagwell's first full acquisition since Stagwell combined with MDC in August 2021. At the time of the acquisition, Goodstuff had 130 employees. Goodstuff became part of Stagwell Media Network. Goodstuff was founded in 2004.
Stagwell in December 2021 bought the remaining 49% stake in Instrument, a Portland, Oregon-based digital agency, for an aggregate purchase price of $157.1 million, giving Stagwell 100% ownership. Stagwell said the agreement replaced a previous agreement that obligated the company to pay an uncapped future earn out that Stagwell believed would have exceeded that purchase price. The purchase price consisted of a closing payment of $37.5 million in cash and $37.5 million in shares of Class A common stock and deferred acquisition payments with an estimated present value at the acquisition date of $82.1 million, payable in three installments through 2024.
MDC April 2, 2018, bought a 51% stake in Instrument for an aggregate purchase price of $35,591,000. The purchase price consisted of a cash payment of $28,561,000 and the issuance of 1,011,561 MDC shares with an acquisition date fair value of $7,030,000. Instrument was founded in 2002 and at the time of acquisition had 175 employees. Instrument in March 2019 bought This Also, a digital brand and product innovation studio in Brooklyn, New York.
The Stagwell Group (legacy):
Stagwell's Code and Theory in October 2020 bought Truelogic Software, an Argentina-based software development firm, for total consideration of $17.3 million ($8.9 million in cash plus contingent consideration).
Stagwell's Code and Theory in August 2020 bought Kettle Solutions, a New York-based web design and content creation firm, for $5.4 million plus up to an additional $11.9 million that is dependent on Kettle reaching defined operating goals in 2020, 2021, 2022 and 2023.
Stagwell in February 2020 acquired Sloane & Co. (Sloane and Company LLC), a PR agency in New York, for $24.4 million in total consideration. Sloane had been owned by MDC.
Stagwell in January 2020 acquired Headliner Labs, a technology consultancy that specializes in chat and voice capabilities, and aligned it with ForwardPMX.
Stagwell in December 2019 bought The Search Agency, a digital agency, for $27.9 million. The Search Agency became part of ForwardPMX.
Stagwell in September 2019 acquired Emerald Research Group, a market research firm in Bellevue, Washington.
Stagwell in April 2019 acquired MultiView, a digital business-to-business agency based in Irving, Texas, for $44.6 million.
Stagwell in January 2019 bought Rhythm Interactive for $5.8 million. Rhythm became part of Code and Theory.
Stagwell in October 2018 acquired a majority stake in travel media and marketing agency Ink Global through its Stagwell Media fund.
Stagwell in April 2018, through RepDef Holdings, bought ReputationDefender for $7.5 million.
Stagwell in April 2017 acquired health care agency Scout through its Stagwell Media fund.
Stagwell in April 2017 bought a minority stake in MMI Agency, a digital agency in Houston.
Stagwell in September 2016 made a preferred share investment in Finn Partners, a public relations agency. As part of the deal, Stagwell bought preferred stock in Finn Partners carrying future conversion rights to a minority interest in the agency.
Stagwell in August 2016 acquired a majority stake in digital and direct marketing agency PMX Agency through its Stagwell Media fund.
Stagwell in January 2016 bought a majority stake in digital agency Code and Theory through its Stagwell Media fund.
MDC Partners (legacy):
MDC in April 2021 bought the remaining 40% stake in data and analytics agency Gale for about $20 million, giving it 100% ownership.
MDC's Allison & Partners in January 2021 acquired Sommerfield Communications, a New York-based boutique corporate communications firm.
MDC in July 2020 bought the remaining 10% stake in Veritas, a PR and influencer marketing agency in Canada, for about $2.2 million, giving it 100% ownership.
MDC in March 2020 bought the remaining 22.5% stake in KWT Global, a PR agency, for about $2.1 million, giving it 100% ownership. MDC in November 2019 bought the remaining 35% of Laird & Partners, a New York ad agency, giving it 100% ownership.
MDC in April 2019 bought the remaining 35% of HPR Partners LLC (Hunter), a PR agency based in New York, giving it 100% ownership.
MDC in September 2018 bought OneChocolate Communications, a digital marketing consultancy based in London, for an aggregate purchase price of $3,231,000, working capital payment of $966,000 and additional deferred acquisition payments with an estimated present value of $2,146,000. OneChocolate became part of Allison & Partners.
MDC in July 2018 bought the remaining 14.87% and 3% stakes in Doner Partners and Source Marketing for an aggregate purchase price of $7,618,000, composed of a closing cash payment of $3,279,000 and additional deferred acquisition payments with an estimated present value of $4,305,000 as of Dec. 31, 2018.
MDC sold LBN Partners in September 2017. MDC in November 2013 had purchased a 70% stake in Local Biz Now (LBN Partners), an Auburn Hills, Michigan-based online local-search marketing firm. The price tag was $35.6 million (consisting of $12.0 million cash; plus contingent deferred acquisition consideration -- based on financial results of the businesses from 2013 to 2017 with final payments due in 2018 -- with an estimated worth at acquisition of $23.6 million). Local Biz Now was founded in 2006.
MDC July 1, 2017, bought 100% of Forsman & Bodenfors, an ad agency in Sweden, for what MDC said was "an estimated aggregate purchase price at acquisition date" of $49,837,000. MDC filings implied the agency had full-year (12-month) revenue of $80.6 million in 2016 and $72.5 million in 2015. MDC in September 2018 merged Forsman & Bodenfors with New York-based ad agency KBS (Kirshenbaum Bond Senecal & Partners), dropping the KBS name.
MDC April 1, 2016, bought the remaining 40% stake in Luntz Global Partners, giving it 100% ownership of the U.S. communications consultancy. The company in January 2014 bought 60% of Luntz. The business in September 2019 rebranded as Storyline Strategies.
MDC in October 2015 bought Unique Influence, a digital agency in Austin, Texas, and moved it into the MDC Media Partners network. Unique Influence later became part of MDC's Assembly.
MDC in May 2015 acquired a 60% stake in Y Media Labs (YML), a digital mobile agency based in Redwood City, California. Aggregate purchase price for the two agencies was $55.3 million ($23.0 million in cash and an estimated $32.3 million in deferred payments based on the agencies' financial results from 2015 to 2020 with final payments due in 2022).
MDC in 2014 took full ownership of Trapeze Media, a firm in which now-former MDC Chairman-CEO Miles Nadal owned a 54% stake. MDC increased its ownership to 100% from 18% by acquiring Nadal's 54% interest and a 28% stake owned by others. MDC then folded Trapeze into Union, a Canadian ad agency owned by MDC.
MDC in fourth-quarter 2014 decided to sell Accent Marketing Services, a customer-service management business. MDC's 10-K for year ended December 2014 restated MDC's financial statements to report Accent as a discontinued operation. MDC completed the sale of Accent in May 2015 for $17.1 million. Accent had been part of MDC's Performance Marketing Services segment.
MDC on Jan. 1, 2014, bought a 60% stake in Luntz Global Partners, as noted above. MDC on Feb. 14, 2014, bought 65% of Kingsdale Partners (Kingsdale Shareholder Services), a Toronto-based shareholder advisory and communications firm. The price tag for the two was $41.3 million at closing plus contingent amounts based on 2014 through 2019 earnings. Kingsdale Shareholder Services in January 2017 rebranded as Kingsdale Advisors. MDC in March 2019 sold Kingsdale back to Kingsdale's founder and CEO. As consideration for the Kingsdale sale, MDC received cash plus the assumption of certain liabilities totaling about $50 million in the aggregate; the sale resulted in a loss of about $3 million.
Also in 2014, MDC bought a 65% stake in Hunter Public Relations (now Hunter), a New York PR agency (see discussion, above); acquired a 75% interest in Albion Brand Communications, a London ad agency that became part of KBS; and made two additional non-material acquisitions.
Total purchase price for the 2014 transactions was $151.2 million, including cash payments of $67.2 million and future estimated contingent purchase payments of about $84.0 million.
MDC's 10-K for year ended December 2013 said: "During 2013, the Company discontinued two subsidiaries and an operating division." Social-commerce venture Dotbox was one of the discontinued units; MDC had purchased a majority stake in Dotbox in March 2012.
MDC reported a 2013 net loss from discontinued operations of $11.4 million (including a loss on disposal of $8.3 million). Discontinued operations in 2013 had revenue of $2.3 million.
MDC's 10-K for year ended December 2012 said: "In 2012, the Company discontinued a subsidiary and certain operating divisions." MDC reported a 2012 net loss from discontinued operations of $6.7 million. Discontinued operations in 2012 had revenue of $18.1 million.
Among organizational changes in 2012, MDC merged its Communefx venture into Source Marketing.
MDC previously owned Core Strategy Group, a marketing consultancy formerly known as Zyman Group. Core Strategy Group in 2012 said it was no longer owned by MDC. In December 2011, MDC discontinued Performance Marketing Group, a division of Accent Marketing Services.
MDC reported a 2011 net loss from discontinued operations of $2.1 million. Discontinued operations in 2011 had revenue of $19.1 million.
In December 2010, MDC discontinued a startup division of Redscout called 007, taking a loss of $722,000 on discontinued operations.
Effective Sept. 30, 2010, MDC ceased Zig US's operations and as a result incurred a goodwill impairment charge of $232,000. The 10-K for year-end December 2010 said: "Including the impairment charge Zig US's results of operations, net of income tax benefits, for the year ended 2010, there was a loss of" $1,046,000.
In June 2010, MDC discontinued a startup called Fearless Progression. As a result, MDC wrote off its investment in Fearless of $710,000.
Effective Dec. 31, 2008, MDC deemed three ventures-Clifford/Bratskeir Public Relations, Ito Partners and Mobium Creative Group (a division of Colle & McVoy)--to be discontinued operations.
Management and employees:
Stagwell said it had approximately 9,100 full-time employees and approximately 1,100 contractors, or a total of 10,200 people worldwide, at year-end 2021.
Mark Penn is Stagwell's chairman-CEO.
Penn became CEO of predecessor MDC Partners on March 18, 2019, and was named chairman effective April 18, 2019.
MDC Partners (legacy):
MDC said it had 4,866 employees at year-end 2020; 5,647 employees at year-end 2019; 6,024 employees at year-end 2018; 6,200 at year-end 2017; 6,138 at year-end 2016; 5,690 at year-end 2015; 5,250 at year-end 2014 (excluding Accent Marketing, which MDC sold); 7,218 at year-end 2013 (including Accent Marketing); 7,984 at year-end 2012; and 6,810 at year-end 2011.
Founder and Chairman-CEO founder Miles Nadal resigned July 20, 2015. He was replaced by Scott Kauffman, a long-time MDC board member.
MDC terminated Kauffman's employment as CEO effective Dec. 31, 2018; an executive committee ran MDC at that point while MDC searched for a CEO.
Stagwell Group founder Mark Penn joined MDC as CEO March 18, 2019. Penn was age 65 at the time of his appointment. Penn in April 2019 added the chairman post, becoming chairman-CEO.
History:
Mark Penn founded The Stagwell Group in June 2015. Before starting Stagwell, Penn held senior executive positions at Microsoft Corp. including oversight of its $2 billion advertising budget, and at WPP.
MDC Partners was formed in Canada on Dec. 19, 1986. Effective that day, the company combined with Branbury Explorations Ltd., a move that made MDC a public company.
The Stagwell Group and MDC Partners merged Aug. 2, 2021. At that point, MDC changed its name to Stagwell Inc.
In its own words: Stagwell is the challenger network built to transform marketing. We deliver 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, our 10,000-plus specialists in 20-plus countries are unified under a single purpose: to drive effectiveness and improve business results for their clients.
We believe that creative plus connected equals effective. We deliver for clients by harmonizing all the new disciplines of marketing into seamless integrated solutions. Our agencies accomplish that across five key marketing disciplines: creative and content production, media, research and insights, public affairs and advocacy, and digital transformation.
Notable 2021 highlights include the successful combination of MDC Partners Inc. and the Stagwell Marketing Group LLC, a merger that positioned Stagwell to chart industry-leading, double-digit revenue growth in Q3 2021. We pioneered an aggressive global expansion strategy via our Global Affiliates Program, which aligned 50-plus partners across key regions of global client growth in the Middle East and North Africa, Latin America, Europe and Asia-Pacific. Further, Stagwell debuted the Stagwell Marketing Cloud, a suite of business transformation solutions built to support in-house marketing teams, with solutions across augmented reality, influencer marketing, brand reputation tracking and more.
Top executive: Mark Penn, chairman and CEO; Jay Leveton, president
Headquarters: Stagwell/285 Fulton St., Floor 65, New York, N.Y. 10007/Phone: (646) 429-1800
Twitter: @stagwell
LinkedIn: https://www.linkedin.com/company/stagwell
https://www.stagwellglobal.com
