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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 3, 2021
STAGWELL INC.
(Exact name of Registrant as Specified in Its
Charter)
| Delaware |
|
001-13718 |
|
86-1390679 |
(State or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(I.R.S. Employer
Identification No.) |
One World Trade Center, Floor 65, New York, NY 10007
(Address of principal
executive offices and zip code)
(646) 429-1800
(Registrant’s Telephone Number)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of
the Act:
| Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
| Class A Subordinate Voting Shares, $0.001 par value |
STGW |
NASDAQ |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Introductory Note
On August 2, 2021, Stagwell Inc. (the “Company”)
announced that it had consummated the previously announced combination of MDC Partners Inc. (“MDC”) and certain subsidiaries
of Stagwell Media LP (“Stagwell Media”) pursuant to that certain Transaction Agreement, dated as of December 21, 2020,
as amended on June 4, 2021 and July 8, 2021 (the “Transaction Agreement”), by and among Stagwell Media, MDC, New MDC
LLC (“New MDC”) and Midas Merger Sub 1 LLC (“Merger Sub”) (the transactions contemplated by the
Transaction Agreement, the “Transactions”).
| Item 4.01 | Change in Auditors |
On August 3, 2021, the Audit Committee of the Board of Directors of
the Company approved the dismissal of BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting
firm and the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s new independent registered
public accounting firm to audit the Company’s consolidated financial statements for the year ending December 31, 2021. Deloitte
served as the independent auditor of Stagwell Marketing Group, LLC prior to the Transactions. Accordingly, BDO, MDC’s independent
registered public accounting firm prior to the Transactions, was dismissed as the Company’s independent registered public accounting
firm effective upon the completion of BDO’s review of the financial statements of MDC as of and for the periods ended June 30, 2021.
The audit report of BDO on MDC’s financial statements as of December
31, 2020 and December 31, 2019 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainties, audit scope or accounting principles.
During the fiscal years ended December 31, 2020 and December 31, 2019,
and the subsequent interim period through August 3, 2021, there were (i) no disagreements with BDO on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedures, which if not resolved to BDO’s satisfaction, would
have caused BDO to make reference thereto in their reports on the consolidated financial statements for such years, and (ii) no “reportable
events” as defined in Item 304(a)(1)(v) of Regulation S-K, other than the material weakness in internal controls in MDC’s
financial statements for the fiscal year ended December 31, 2019.
During the fiscal years ended December 31, 2020 and December 31, 2019
and the subsequent interim period through August 3, 2021, neither the Company nor anyone on the Company’s behalf consulted with
Deloitte regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided
to the Company by Deloitte that Deloitte concluded was an important factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined
in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event, as that term is describe in Item 304(a)(1)(v) of Regulation S-K.
The Company provided BDO with a copy of disclosures it is making in
this Form 8-K and requested that BDO furnish a letter addressed to the Securities and Exchange Commission stating whether or not it agrees
with the statements above. A copy of BDO’s letter dated August 9, 2021 is filed as Exhibit 16.1 to this Current Report on Form 8-K.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
Resignation and Appointment of Directors
On August 3, 2021, the Board of Directors of the Company (the “Board”)
appointed Eli Samaha as a director at the recommendation of the Nominating and Corporate Governance Committee of the Board. Mr. Samaha
had been named by Stagwell Media as a director designee to be nominated to the Board pursuant to the terms of the Transaction Agreement.
In addition, Mr. Samaha replaced Irwin Simon as a member of the Audit Committee of the Board, and Secretary Rodney Slater replaced Ambassador
Charlene Barshefsky as a member of the Nominating and Corporate Governance Committee, in each case, upon the recommendation of the Nominating
and Corporate Governance Committee of the Board.
Mr. Samaha, 35, is the Founder and Managing Partner of Madison Avenue
Partners, LP, a value-focused investment manager whose partners include leading university endowments, hospital systems, and philanthropic
foundations. Prior to founding Madison, Mr. Samaha was a Partner at Newtyn Management and held roles at KPS Capital Partners and GSC Group.
He received a bachelor’s degree in Mathematics from Dartmouth College.
Mr. Samaha is expected to receive compensation commensurate with the
compensation of the Company’s existing non-management directors.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 9, 2021
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STAGWELL INC. |
| |
|
|
| |
By: |
/s/ Frank Lanuto |
| |
|
Frank Lanuto |
| |
|
Chief Financial Officer |
