MDC Partners is a mid-sized North American marketing group, housing a broad portfolio of creative and diversified marketing agencies, now headquartered in the US, but with a modest international network. Operating primarily as a venture capital investor, it accumulated stakes in a collection of separately branded, often single-office agencies, several of which have gradually developed a limited international profile. MDC has become best known for its shareholdings in three admired US-based creative agencies, Crispin Porter & Bogusky, 72andSunny and Anomaly each of whom has also established outposts in Europe. Another - formerly KBS - was merged into Swedish agency Forsman & Bodenfors, with all offices adopting the latter's name. Other subsidiaries include fashion specialist Laird & Partners, Detroit-based Doner and media agency Assembly, as well as a still sizeable collection of other agencies, mostly operating below the radar of the main industry. The key benefit MDC originally offered its partner agencies was an upfront payout for their shares. Beyond that, businesses were left with operational independence, including the freedom not to work with each other to grow faster or more efficiently. Gradually, though, MDC was forced to encourage synergies between its various subsidiaries; but after several years of rapid growth, the group ran into a succession of increasingly serious problems in the 2010s. An SEC investigation into expenses claims filed by founder Miles Nadal led to his abrupt departure in 2015; soon afterwards, the rapid growth curve began to stall, and in 2018 MDC finally launched a strategic review. That led to the effective takeover of the group by industry veteran Mark Penn, who became CEO and controlling shareholder in Spring 2019. As a result, MDC is now partnered by Penn's separate Stagwell Group roll-up, with its own roster of agencies, of which the best known are perhaps Code & Theory, Harris Research and Observatory (formerly CAA Marketing). MDC's combined revenues hit a high of $1.51bn in 2017, before slipping back to $1.48bn in 2018. The group has reported net losses virtually ever year since 2000, with just two annual profits in 2008 and 2017 respectively. The deficit for 2018 was $132m.
Capsule checked 25th October 2019
Who are the clients of MDC Partners? See individual agency profiles below for more
Who are the competitors of MDC Partners? See ranking of Leading Global Marketing Groups
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Historical profile information for MDC Partners
Adbrands Daily Update 14th Nov 2019: With all results now in, Omnicom led the pack for 3Q with organic growth of 2.2%, followed by Interpublic at 1.4% and WPP on 0.7%. Havas was flat at 0.0% ahead of Dentsu -0.1%, Publicis -2.7% and MDC Partners -7.5%.
Adbrands Daily Update 7th Nov 2019: As bad as Publicis Groupe's Q3 organic decline was, the French company can at least console itself with the fact, that MDC Partners' was significantly worse. On an organic basis excluding currencies and M&A, revenues plunged by a shock 7.5% for the quarter, anew record for any of the marketing holding companies. The reported figure was $342.9m, with a net loss of $5.1m. New CEO and controlling shareholder Mark Penn may perhaps be wondering if he made the right decision in buying into the group. Yet he continues to accentuate the positive in his public statements: "We are seeing the results of prudent financial management," he said, "while we cycle through revenue softness in select areas of the portfolio and actively execute against our strategic plan. We've delivered year-to-date growth in adjusted EBITDA and [profit] margin... Net new business also remained strong this quarter... and we continued this momentum into the fourth quarter ... As we continue to move decisively on our plan, we have confidence in our ability to return to revenue growth and continue to deliver improving profit margins." Here's hoping. Yet while a handful of MDC's biggest agencies - like Anomaly, 72andSunny and recently Doner - are grabbing headlines with account wins and strong creative work, we don't hear much about the other 47 agencies - yes, 47! - in the portfolio. Could further mergers or disposals be on the cards?
Adbrands Daily Update 7th Aug 2019: MDC's results for 2Q showed no magic bullet effect from the arrival of new CEO Mark Penn, at least on topline. Negative growth of -2.4% was MDC's worst ever quarterly result, to reported revenues of $362m. Earnings remained solid at $7.3m, but most of the benefits were taken by Penn's Stagwell Group and MDC's preference shareholders. Ordinary investors were left with net income of just $775k.
Adbrands Daily Update 8th May 2019: Investors were relieved to see signs of stability at hard-pressed MDC Partners, following the introduction of new CEO and effective controlling shareholder Mark Penn. There's no magic bullet just yet: organic decline was 0.9%, actually the second worst ever from MDC, and the group reported a net decline of almost $12m in new business in the quarter. However net losses were slashed from $31m in 1Q 2018 to just $2.5m. The group predicted organic growth for the full year at between zero and 2%. It was hardly the best set of numbers, but investors rewarded the company with a 10% hike in its share price. With all results now in, Interpublic was clear champion of 1Q with 6.4% organic growth, followed by Omnicom at 2.5% and Havas at 0.1%. MDC was negative -0.9%, ahead of Dentsu at -1.6%, Publicis at -1.8% and WPP at -2.8%.
Adbrands Daily Update 15th Mar 2019: As rumoured last week, marketing industry veteran Mark Penn was confirmed as the new CEO of MDC Partners. At the same time, his marketing services roll-up Stagwell has acquired a large minority stake in ordinary equity and preference shares for $100m. Assuming full conversion of the preference shares, the stake would be between 25% and 30% of MDC. Said Penn, "I have admired MDC for a long time and believe wholeheartedly in its mission. Its agencies share an impressive entrepreneurial culture and the network as a whole is steeped in untapped potential. I am eager to begin applying not only our investment and resources, but also a plan based on my expertise, towards growth and the creation of significant value for our shareholders." At the same time, MDC finally reported figures for 4Q and full year 2018. The final quarter was lacklustre, with an organic decrease of 0.3% (the same decline as Publicis reported). Full year revenues were $1.48bn with a net loss of $132.1m. The latter included an $80m charge for asset impairment.
Adbrands Daily Update 8th Mar 2019: Marketing industry veteran Mark Penn is in talks to become CEO of MDC Partners. The former advisor to Bill & Hillary Clinton, former CEO of Burson-Marsteller, and former strategic chief of Microsoft now runs his own much smaller marketing services group Stagwell. One suggested scenario might see an equity alliance between the two groups, with Stagwell acquiring a minority stake in MDC; Penn would serve as CEO of both companies. Stagwell's subsidiaries include digital agency Code & Theory, research company Harris Insights and public affairs agency SKDKnickerbocker.
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