XML 47 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Acquisitions
 3 Months Ended
Mar. 31, 2013
Business Combinations [Abstract]  
Acquisitions
4. Acquisitions

 

Pro forma financial information has not been presented for the 2013 acquisitions noted below since they did not have a material effect on the Company’s operating results. During the first quarter of 2013, the Company completed an immaterial transaction with a majority owned entity.

 

2012 Acquisitions

 

During 2012, the Company completed a number of transactions. Effective March 28, 2012, MDC invested in Doner Partners LLC (“Doner”). The Company acquired a 30% voting interest and a convertible preferred interest that allows the Company to increase ordinary voting ownership to 70% at MDC’s option, at no additional cost to the Company. Doner is a full service integrated creative agency. In addition, the Company acquired a 70% interest in TargetCast LLC (“TargetCast”). TargetCast is a full service media agency that expands our media strategy and activation offerings. The Company acquired a 51% interest in Dotbox LLC (“Dotbox”), and subsequently acquired the remaining 49% of the equity interests in Dotbox. The Dotbox acquisition forms the foundation for a potential e-commerce solution within the network. Doner and Dotbox are now included in the Company’s Strategic Marketing Services segment, while TargetCast is included in the Company’s Performance Marketing Group segment. During the year, the Company also entered into various immaterial transactions with certain majority owned entities.

 

The aggregate purchase price for these transactions has an estimated present value at acquisition date of $99,299 and consisted of total closing cash payments of $23,471, and additional contingent deferred acquisition consideration that are based on the financial results of the underlying businesses from 2012 to 2018 with final payments due in 2018 with an estimated present value at acquisition date of $67,812. During 2012, the Company paid $8,016 relating to a working capital payment. An allocation of excess purchase price consideration of these acquisitions to the fair value of the net assets acquired resulted in identifiable intangibles of $31,968 consisting primarily of customer lists and covenants not to compete, and goodwill of $113,404 representing the value of assembled workforce. The identified assets will be amortized over a five to ten year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized. In addition, the Company has recorded $18,501 as the present value of noncontrolling interest. The intangibles and goodwill of $145,372 are tax deductible. In connection with the step transactions, the Company also recorded an entry of $197 to reduce short term noncontrolling interest included in accrued and other liabilities, decrease redeemable noncontrolling interest by $12,523 and an offset to additional paid-in-capital of $13,920.

 

Net Income (Loss) Attributable to MDC Partners Inc. and

Transfers (to) from the Noncontrolling Interest 

    Three Months Ended March 31,  
    2013     2012  
Net loss attributable to MDC Partners Inc.   $ (43,158 )   $ (26,281 )
Transfers to the noncontrolling interest:                
Decrease in MDC Partners Inc. paid-in capital for purchase of equity interests in excess of Redeemable Noncontrolling Interests     —       (1,263 )
Decrease in MDC Partners Inc. paid-in capital for purchase of equity interests in excess of noncontrolling interests     (1,059 )     —  
Net transfers from noncontrolling interest   $ (1,059 )   $ (1,263 )
Change from net loss attributable to MDC Partners Inc. and transfers to noncontrolling interest   $ (44,217 )   $ (27,544 )