Stagwell Group, the self-described holding company alternative founded by former Microsoft executive Mark Penn in 2015, has reportedly agreed to make a $100 million investment in MDC Partners. Penn will take over as CEO of the struggling holding company following the deal and assume a role on its board of directors.
MDC Partners reportedly briefed its executive team on the transaction at 5 p.m. today. Media outlets started reporting the news this evening, citing an internal memo outlining the deal and an interview with Penn.
“The biggest challenge for MDC is getting all the agencies firing on strong cylinders,” Penn told The Wall Street Journal. “Some agencies are doing quite well. Some have run into real headwinds.”
Representatives for the two companies did not immediately respond to requests for comment. MDC’s next earnings call takes place Friday morning.
The news concludes an executive search to replace CEO Scott Kauffman led by search firm Grace Blue, which also did not respond to an email seeking comment.
MDC Partners named new executive leadership at the beginning of the year. Kauffman will exit the company following a September announcement of his impending departure. Multiple MDC Partners agencies reportedly attempted to buy themselves back from the holding company last year but either had their offers rejected by MDC’s board or abandoned the process. On Wednesday, MDC Partners agency Instrument announced it had acquired Brooklyn agency This Also, expanding its operations to New York.
The network includes several prominent ad agencies and PR firms including Anomaly, 72andSunny, Crispin Porter + Bogusky and Allison+Partners.
Penn has an extensive career in public relations, corporate affairs and politics, having formerly served as an adviser to Bill and Hillary Clinton. Stagwell Group has the financial backing of former Microsoft CEO and Los Angeles Clippers owner Steve Ballmer.
This story is developing.