In November, MDC Partners said it had hired an adviser to evaluate its capital structure strategy. As of Sept. 30, the company had total liabilities of $2.09 billion and total assets of $1.6 billion.
Goldman Sachs’ investment will be made through the purchase of non-voting convertible preference shares, which can be converted into class A shares at $10 per share.
Based on Tuesday’s close, the conversion price represents a premium of about 48 percent.
If Goldman converts all its preference shares of MDC to class A shares, it will end up owning 15 percent of the entire company.
Shares of MDC Partners — which owns ad agencies such as 72andSunny and Crispin, Porter + Bogusky — rose as much as 37.8 percent to $9.30, its biggest intraday percentage gain in nearly 17 months.
Bradley Gross, a managing director in the merchant banking division of Goldman Sachs, will join MDC’s board after the close of the transaction, increasing the size to seven members.
The transaction is expected to close in the first quarter of 2017.
Proceeds from the investment will be used to pay down debt, MDC said.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta