S&P assigns Stagwell, notes B+

S&P said it assigned B+ ratings to Stagwell Inc. and its planned $1 billion in senior unsecured notes. The notes’ recovery rating is 4.

Stagwell is the combination of Stagwell Marketing Group LLC (SMG) and MDC Partners Inc. “We expect it to generate revenues of roughly $2.15 billion in 2021. This combination is a meaningful increase in scale, which could help reduce revenue volatility from changes in client volumes. It also improves the diversity of advertising and marketing services Stagwell can offer,” S&P said in a press release.

The outlook is stable. “The stable outlook reflects our expectations that Stagwell will integrate the operations of Stagwell Marketing Group LLC (SMG) and MDC Partners Inc. and continue positive operating performance such that organic revenue and EBITDA growth allow the company to lower S&P Global Ratings-adjusted leverage to the high-4x area in 2021 and the mid-4x area in 2022,” the agency said.

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