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Goldman Sachs to provide $95 mln to MDC Partners

Goldman Sachs has agreed to invest $95 million in MDC Partners, a influential marketing and communications networks. The deal is expected to close in the first quarter of this year. LionTree and JPMorgan provided financial advice to MDC Partners on this transaction.


NEW YORK, Feb. 15, 2017 /PRNewswire/ — (NASDAQ: MDCA) — MDC Partners Inc. (“MDC Partners” or the “Company”) today announced that it has entered into a definitive agreement with an affiliate of the Merchant Banking Division of Goldman Sachs (“Goldman Sachs”) pursuant to which Goldman Sachs has agreed to invest $95 million in MDC Partners through the purchase of non-voting convertible preference shares (the “Preference Shares”). In connection with the closing of the transaction, Bradley J. Gross, a managing director in the Merchant Banking Division of Goldman Sachs, will join the MDC Partners Board of Directors, which will expand to seven members. Subject to the satisfaction of certain conditions, the transaction is expected to close in the first quarter of 2017.

Scott L. Kauffman, Chairman and Chief Executive Officer of MDC Partners, said, “We are extremely pleased to be partnering with Goldman Sachs. Their investment in MDC affirms the value of our world-class agency portfolio, strengthens our balance sheet, and validates a solid finish to 2016 and our prospects going forward. Brad and his team bring an exceptional track record and important expertise to our continued pursuit of maximizing long-term shareholder value.”

Bradley J. Gross, Managing Director of Goldman Sachs, said, “We are excited to partner with MDC to help drive growth and innovation in the marketing and communications industry. The MDC partner agencies are market leaders with strong reputations and a demonstrated history of serving their clients. We look forward to working with Scott and his team to further position the company for long term growth.”

Upon completion of the transaction, Goldman Sachs will own approximately 15% of the outstanding equity of the Company, assuming the full conversion of the Preference Shares into the Company’s Class A common shares (the “Class A Shares”). The Preference Shares will have a liquidation preference that accretes at a rate of 8.0% per annum, compounded quarterly until the five-year anniversary of the issuance date of the Preference Shares.

The Preference Shares will be convertible at the option of the holder into Class A Shares at an initial conversion price of $10.00 per Preference Share (subject to customary adjustments for share splits and combinations, dividends, recapitalizations and other matters), which represents a 48% premium to the 30-day average closing price of $6.75 per Class A Share. The Company may force conversion of the Preference Shares into Class A Shares after two years if the Class A Shares close at or above 125% of the then-applicable conversion price for at least 30 consecutive trading days, and after five years if the Class A Shares close at or above 100% of the then-applicable conversion price for at least 30 consecutive trading days.

MDC Partners expects to use the net proceeds from the investment to pay down existing debt under the Company’s credit facility and for general corporate purposes.

LionTree Advisors acted as lead advisor in connection with their previously-announced engagement to conduct a comprehensive review of the Company’s financial and capital structure, which is now concluded. LionTree and JPMorgan acted as financial advisors to the Company on this transaction.

About MDC Partners Inc.
MDC Partners is one of the fastest-growing and most influential marketing and communications networks in the world. Its 50+ advertising, public relations, branding, digital, social and event marketing agencies are responsible for some of the most memorable and engaging campaigns for the world’s most respected brands. As “The Place Where Great Talent Lives,” MDC Partners is known for its unique partnership model, empowering the most entrepreneurial and innovative talent to drive competitive advantage and business growth for clients. By leveraging technology, data analytics, insights, and strategic consulting solutions, MDC Partners drives measurable results and optimizes return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at and follow us on Twitter at

About Goldman Sachs’ Merchant Banking Division
Founded in 1869, The Goldman Sachs Group, Inc., is a leading global investment banking, securities and investment management firm. Goldman Sachs’ Merchant Banking Division (MBD) is the primary center for the firm’s long-term principal investing activity. With nine offices across seven countries, MBD is one of the leading private capital investors in the world with equity and credit investments across corporate, real estate, and infrastructure strategies. Since 1986, the group has invested approximately $180 billion of levered capital across a number of geographies, industries and transaction types.