S&P puts MDC on positive watch

S&P said it placed all its MDC Partners Inc. ratings, including the B issuer rating, on CreditWatch with positive implications after it reported an agreement to combine with Stagwell Media LP in an all-stock deal.

“Stagwell operates a portfolio of niche marketing services companies focused on digital advertising, market research, marketing communications, and creative content generation. We believe its specialty in digital services and polling research will complement MDC's portfolio of creative advertising agencies. Moreover, we expect the combined company will benefit from Stagwell's history of positive revenue growth, good EBITDA margins, and favorable cash generation,” S&P said in a press release.

The positive watch reflects that S&P could raise its MDC ratings by one notch at the transaction's close. The agency said it sees the combined company's pro forma leverage declining to the low-4x area under the proposed deal terms, the agency said.

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