MDC Partners reported an 8.7% increase in third quarter revenue to $289 million with a nearly 15% gain in EBITDA to $39.4 million. Organic growth for the quarter was 9.3%, the highest of the reporting holding companies, although from a much lower revenue base. The company also announced a 3-for-2 stock split that is scheduled to take effect next month.
MDC said that it generated $34 million in Q3 net new business revenue--including 72andSunny's global Shirmnoff win--and $107 million in net new business revenue for the first nine months.
On a conference call with analysts to discuss results MDC CEO Miles Nadal said that the company saw a “tremendous amount of new business activity” in the third quarter. However, unlike some of his holding company peers, Nadal said he wasn’t sure whether it was a direct result of the announced merger between Omnicom and Publicis.
Certainly part of the reason for the heightened activity, said Nadal, is that “clients are under siege to drive growth” and ROI from their marketing expenditures. The merger, he added, will put pressure on the two companies to focus on their work and its impact while also trying to implement synergies from the combination. “We don’t have that distraction,” he said of the latter.
One area where MDC will benefit from the proposed merger is on the talent front, Nadal said. “These mergers have never benefitted the talent pool,” he added, resulting in staff leaving for what they perceive as better places to work.
For the first nine months of the year MDC reported a 9.1% rise in revenue to $842.5 million with organic growth of 9.1%.
Nadal said the company’s higher-than-industry-average organic growth reflects the fact that its acquisition spree of several years back is paying off. The company hasn’t made an acquisition in 19 months. Partly that’s because it hasn’t seen any “exceptional opportunities,” Nadal said.