MDC Partners Special Committee Responds To Indaba Capital Management, L.P. 1
The Special Committee of Independent Directors of MDC Partners Inc. responded today to press reports indicating that Indaba Capital Management, L.P. (“Indaba”) will vote against the proposed business combination (the “Combination”) involving MDC Partners and Stagwell Media (“Stagwell”) with the following statement:

“The MDC Special Committee, MDC executives and Stagwell executives have met with Indaba on multiple occasions over the past several months to highlight the many strategic benefits of the Combination and the exceptional opportunity for value creation the Combination provides to MDC shareholders.  We are disappointed that Indaba has chosen to take its private concerns public and believe its analysis and other suggestions are inaccurate and irresponsible.

“The Special Committee is gratified that most MDC investors appear to recognize the value that can be created through the Combination. Prior to the announcement of Stagwell’s interest in combining with MDC on June 26, 2020, MDC stock closed at $1.15 per share. MDC’s stock closed at $4.69 per share, as of May 26, 2021, at or near its highest point at any time during 2019 and 2020. In addition, the volume of shares traded has also increased substantially. We have no doubt that a significant portion of this appreciation in value and trading is due to enthusiasm for the Combination, and the view of most shareholders that the Combination will create growth and cash flow that will generate value for MDC shareholders going forward.

“The Special Committee agrees. We worked tirelessly on behalf of MDC shareholders, sought the advice of financial advisors, and negotiated over a long period of time to ensure MDC shareholders received fair value for their shares in MDC. We firmly believe that MDC shareholders should, and largely do, welcome and support the Combination, which offers MDC the chance to partner with leading digital and technology-focused marketing businesses to create profitable growth opportunities and a better company.

“In the view of the Special Committee, Stagwell is at the forefront of technology, digital marketing and strategic communications trends and has generated consistently high margins and double-digit revenue and EBITDA growth since its founding. MDC has been in the midst of a transformation, but has not yet returned to organic growth and remains constrained by the high leverage on its balance sheet as well as a portfolio of agencies that are heavily weighted to creative and traditional advertising.

“The fact is this deal makes compelling strategic and financial sense and that is well-recognized in the market.  This conclusion is validated by the fact that, since June 2020 when Stagwell approached MDC Partners with a public overture to combine the two companies, there has been an opportunity for other buyers to emerge, and no other party has come forward with any other proposal.  

“It is unfortunate that, after several conversations with both representatives of the Special Committee and MDC management, Indaba claims it does not recognize the strategic merits of this transaction or the value creation it has already provided to MDC shareholders. Indaba’s resistance to a transaction that has been embraced by the market and created a significant uplift in MDC’s share price puts the Combination at risk, which is regrettable for all MDC shareholders. We encourage other MDC shareholders to read carefully our full proxy statement, to vote in favor of the Combination and to protect the gains in the stock price that have already resulted from the announcement of this attractive transaction.”

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communications networks in the world. As “The Place Where Great Talent Lives,” MDC Partners is celebrated for its innovative advertising, public relations, branding, digital, social and event marketing agency partners, which are responsible for some of the most memorable and effective campaigns for the world’s most respected brands. By leveraging technology, data analytics, insights and strategic consulting solutions, MDC Partners drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at mdc-partners.com, 

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