MDC Partners and marketing consultancy Stagwell Group, both led by Mark Penn, have agreed to merge, according to the two companies.
Stagwell Group initially proposed the merger in June. As of Monday, MDC Partners’ board of directors had approved the merger, although it will still be subject to further approvals.
Founded by Penn in 2015, Stagwell Group invested $100 million into MDC Partners last year. Penn has since served as chairman and CEO of MDC Partners as well as managing partner of Stagwell Group.
MDC Partners owns agencies including 72andSunny, Anomaly, CPB, Colle McVoy and Doner. Stagwell Group’s agencies include Code and Theory and creative consultancy Wolfgang. Together, the combined entity will employ 8,600 people across 23 countries. According to Stagwell Group, the two would have generated more than $2 billion in net revenue last year.
In a statement announcing the merger, the companies said they will manage $4.4 billion in media spend once combined. Additionally, they said the new offering could potentially generate annual organic growth of more than 5%.
“This is a new day for MDC and Stagwell,” Penn said in a statement. “MDC is celebrated for bringing award-winning creative firepower to the world’s leading and most ambitious companies, and Stagwell has been built with deep and sophisticated technology at its core. Unencumbered by legacy structures or assets, the combined company will have the integrated, modern offerings marketers deserve, and the resources to invest meaningfully in our global capabilities, our talent and our clients’ future.”
In October, MDC Partners saw its third quarter revenue drop 16.4%. The company said the losses were largely due to Covid-19 and its impact on client spending.
MDC Partners was founded by Miles Nadal in 1980 as Multi Discipline Communications and launched its IPO in 1987. Crispin Porter + Bogusky (now CPB) was added in 2001, with Anomaly acquired in 2010 and 72andSunny added in 2011.
In 2015, founder Nadal abruptly quit the holding company amid an investigation by the Securities and Exchange Commission into MDC’s CEO expenses.
Penn was named CEO and chairman in March 2019, in a leadership shift corresponding with Stagwell Group’s investment, which amounted to a little under a 30% ownership stake in MDC.