MDC Partners Inc. announced today that it is soliciting consents from holders of its 7.500% Senior Notes due 2024, CUSIP C5429X AJ5 and 552697 AQ7 (Rule 144A) $870,256,000 aggregate principal amount outstanding, to certain proposed amendments to the indenture dated March 23, 2016 among the Issuer, certain guarantors of the Notes identified as Note Guarantors therein and The Bank of New York Mellon, as trustee, under which the Notes were issued, as described below and upon the terms and subject to the conditions set forth in the consent solicitation statement, dated January 21, 2021. Unless otherwise indicated, capitalized terms used but not defined in this announcement have the meaning assigned to them in the Consent Solicitation Statement.
On December 21, 2020, the Issuer announced that it had entered into a definitive transaction agreement with Stagwell Media LP ("Stagwell") to combine their respective businesses. As more fully described in the Consent Solicitation Statement, the purpose of the solicitation is to permit, by way of certain waivers of and amendments to the restrictive covenants and certain other provisions contained in the Indenture (the "Proposed Amendments and Waivers"), the consummation of this business combination transaction whereby Stagwell is expected to contribute to the Issuer a portfolio of marketing services companies, in consideration for which Stagwell will subscribe for and be issued, directly or indirectly, certain equity securities in the Issuer, which will, in aggregate, result in a Change of Control (as such term is defined under the Indenture) occurring, in each case following a reorganization of the Issuer and its subsidiaries (the "Proposed Transaction").
The solicitation commenced today and will expire at 5:00 p.m. New York City time, on February 4, 2021 unless terminated or extended (such date and time, as it may be extended, with respect to the solicitation, the "Expiration Time"). Consents may be revoked by holders prior to but not after the earlier of the Expiration Time and the Effective Time on the terms and conditions set out in the Consent Solicitation Statement.
Adoption of the Proposed Amendments and Waivers requires consents from holders of at least a majority in principal amount of the then-Outstanding Notes. Holders of a majority in aggregate principal amount of the Notes have already irrevocably agreed to consent to the Proposed Amendments and Waivers. While holders in addition to those that have already irrevocably agreed to consent may deliver consents to the solicitation, the Issuer expects that, whether or not such further holders do so, the required consents for the Proposed Amendments and Waivers will be obtained in the solicitation.
The Proposed Amendments and Waivers are being treated as a single request for consents, and, upon the terms and subject to the satisfaction or waiver of all of the conditions set forth in the Consent Solicitation Statement, a cash payment of:
| (i) | $20.00 will be payable on the date the supplemental indenture (the "Supplemental Indenture") reflecting the Proposed Amendments and Waivers is executed to all holders as of 5:00 p.m. New York City time on the record date of January 20, 2021 (whether they consented to the Proposed Amendments and Waivers or not) (the "Payment Holders"); and |
| (ii) | in the event that: (a) the Issuer makes an announcement informing holders: (1) that the Proposed Amendments and Waivers are operative and (2) when the closing of the Proposed Transaction is expected to occur and (b) the Proposed Amendments and Waivers become operative and the Proposed Transaction is consummated, an additional $10.00 will be payable on the date of the closing of the Proposed Transaction to the Payment Holders (whether or not they are still holders of the Notes at such time), |
in each case, in respect of each $1,000 principal amount of Outstanding Notes held by the relevant Payment Holder as of 5:00 p.m. New York City time on the record date of January 20, 2021. No consent payments will be payable if the required consents for the Proposed Amendments and Waivers are not obtained and the Supplemental Indenture is not executed. The consent payment described in prong (ii) above will not be payable if the Issuer does not make the announcement described in that prong (ii) in order for the Proposed Amendments and Waivers to become operative or if the Proposed Transaction is not consummated.
Holders are referred to the Consent Solicitation Statement for the detailed terms and conditions of the solicitation.
The Issuer has retained Global Bondholder Services Corporation to serve as Information Agent and Tabulation Agent for the solicitation. Questions concerning procedures for delivering consents and requests for documents should be directed to the Information and Tabulation Agent at (866) 794-2200 (toll free) or contact@gbsc-usa.com.
The Issuer has retained Moelis & Company LLC to serve as Solicitation Agent. Questions concerning the terms of the solicitation should be directed to the Solicitation Agent at (212) 833-3800.
The solicitation is being made solely by means of the Consent Solicitation Statement and on the terms and subject to the conditions set forth in the Consent Solicitation Statement. The Issuer may, in its sole discretion, terminate, extend or amend the solicitation at any time as described in the Consent Solicitation Statement. This announcement is for information purposes only and is neither an offer to sell nor a solicitation of an offer to buy any security and is not a solicitation of consents with respect to the Proposed Amendments and Waivers or any securities. The solicitation is not being made in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable state or foreign securities or blue sky laws.
Neither the Consent Solicitation Statement nor any documents related to the solicitation have been filed with, or reviewed or approved by, any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Consent Solicitation Statement or any documents related to the solicitation, and it is unlawful and may be a criminal offense to make any representation to the contrary.
About the Issuer
MDC Partners Inc. is one of the most influential marketing and communications networks in the world. As "The Place Where Great Talent Lives," MDC Partners Inc. 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 Inc. drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners Inc. and its partner firms, visit our website at www.mdc-partners.com and follow us on Twitter at http://www.twitter.com/mdcpartners.
