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Acquisitions and Dispositions | 12 Months Ended
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Dec. 31, 2024
Business Combinations [Abstract] |
Acquisitions and Dispositions | Acquisitions 2024 Acquisitions Acquisition of Unicepta On December 19, 2024, the Company acquired UNICEPTA Holding GmbH (“Unicepta”), a global media monitoring and analytics platform, for 60.1 million Euros (“€”) (approximately $62 million), of which €23.8 million (approximately $24 million) was paid in cash, €25.0 million (approximately $26 million) in 3,390,788 shares of the Company’s Class A Common Stock , €0.7 million in a deferred cash payment (approximately $1 million), which was paid in January 2025, and €10.6 million (approximately $11 million) attributable to contingent consideration which is considered part of the purchase price, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of €40.0 million (approximately $42 million) subject to meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The consideration has been allocated to the assets acquired and assumed liabilities of Unicepta based upon fair values. The preliminary purchase price allocation is as follows:
|  | Amount
|  | (dollars in thousands)
Cash and cash equivalents |  | $ | 2,215 |
Accounts receivable, net |  | 8,472 |
Other current assets |  | 3,913 |
Right-of-use lease assets |  | 5,914 |
Fixed assets |  | 445 |
Identifiable intangible assets |  | 35,312 |
Accounts payable |  | (1,276) |
Accruals and other liabilities |  | (2,967) |
Advance billings |  | (1,527) |
Current portion of lease liabilities - operating leases |  | (1,067) |
Long-term lease liabilities - operating leases |  | (5,406) |
Deferred tax liabilities, net |  | (11,445) |
Other liabilities |  | (3,460) |
Net assets assumed |  | 29,123 |
Goodwill |  | 33,291 |
Purchase price consideration |  | $ | 62,414 |
The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Unicepta. Goodwill of $33.3 million was assigned to the Stagwell Marketing Cloud Group reported within All Other. The goodwill is not deductible for income tax purposes. Intangible assets consist of trade names, customer relationships, and developed technology. We amortize purchased intangible assets on a straight-line basis over their respective useful lives. The weighted average life of the total acquired identifiable intangible assets is 10 years. The following table presents the details of identifiable intangible assets acquired:
|  | Estimated Fair Value |  | Estimated Useful Life in Years
|  | (dollars in thousands) |  |
Customer relationships |  | $ | 22,083 |  |  | 12
Trade names |  | 5,417 |  |  | 10
Developed Technology |  | 7,812 |  |  | 5
Total acquired intangible assets |  | $ | 35,312 |  |  |
Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
|  | Year Ended December 31, 2024 |  | Year Ended December 31, 2023
|  | (dollars in thousands)
Revenue |  | $ | 2,892,586 |  |  | $ | 2,579,374 |
Net income |  | $ | 5,216 |  |  | $ | 33,939 |
Revenue attributable to Unicepta, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $1.7 million. Net income attributable to Unicepta, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $0.4 million. The purchase price accounting is not yet final as the Company has not yet finalized its valuation processes and therefore may still make adjustments. Acquisition of Consulum On October 1, 2024, the Company acquired Consulum (Cayman) Limited (“Consulum”), a government advisory firm that provides public relations management and media and marketing services, for $82.8 million, of which $58.3 million was paid in cash, $12.9 million in 1,810,274 shares of the Company’s Class A Common Stock, and $11.3 million was attributed to contingent consideration which is considered part of the purchase price, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $90.0 million, partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The consideration has been allocated to the assets acquired and assumed liabilities of Consulum based upon fair values. The preliminary purchase price allocation is as follows:
|  | Amount
|  | (dollars in thousands)
Cash and cash equivalents |  | $ | 2,151 |
Accounts receivable, net |  | 26,845 |
Other current assets |  | 3,094 |
Right-of-use lease assets |  | 2,173 |
Fixed assets |  | 2,032 |
Identifiable intangible assets |  | 57,200 |
Accounts payable |  | (2,078) |
Accruals and other liabilities |  | (9,167) |
Advance billings |  | (5,425) |
Current portion of lease liabilities - operating leases |  | (983) |
Long-term lease liabilities - operating leases |  | (1,065) |
Deferred tax liabilities, net |  | (8,618) |
Net assets assumed |  | 66,159 |
Goodwill |  | 16,593 |
Purchase price consideration |  | $ | 82,752 |
The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Consulum. Goodwill of $16.6 million was assigned to the Communications Network reportable segment. The goodwill is not deductible for income tax purposes. Intangible assets consist of trade names and customer relationships. We amortize purchased intangible assets on a straight-line basis over their respective useful lives. The weighted average life of the total acquired identifiable intangible assets is nine years. The following table presents the details of identifiable intangible assets acquired:
|  | Estimated Fair Value |  | Estimated Useful Life in Years
|  | (dollars in thousands) |  |
Customer relationships |  | $ | 43,800 |  |  | 7
Trade names |  | 13,400 |  |  | 10
Total acquired intangible assets |  | $ | 57,200 |  |  |
Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
|  | Year Ended December 31, 2024 |  | Year Ended December 31, 2023
|  | (dollars in thousands)
Revenue |  | $ | 2,893,599 |  |  | $ | 2,585,024 |
Net income |  | $ | 19,346 |  |  | $ | 49,039 |
Revenue attributable to Consulum, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $14.7 million. Net loss attributable to Consulum included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $1.6 million. The purchase price accounting is not yet final as the Company has not yet finalized its valuation processes and therefore may still make adjustments. Acquisition of Team Epiphany On January 2, 2024, the Company acquired Team Epiphany, LLC (“Epiphany”), a consumer marketing company, for $16.7 million, of which $11.7 million was paid in cash and $5.0 million in 797,916 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $17.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The goodwill is deductible for income tax purposes. The consideration has been allocated to the assets acquired and assumed liabilities of Epiphany based upon fair values. The purchase price allocation is as follows:
| Amount
| (dollars in thousands)
Cash and cash equivalents | $ | 1,095 |
Accounts receivable, net | 8,283 |
Expenditures billable to clients | 4,823 |
Other current assets | 402 |
Right-of-use lease assets | 2,788 |
Fixed assets | 184 |
Identifiable intangible assets | 4,316 |
Accounts payable | (1,086) |
Accruals and other liabilities | (664) |
Advance billings | (8,808) |
Current portion of lease liabilities - operating leases | (516) |
Long-term lease liabilities - operating leases | (2,600) |
Net assets assumed | 8,217 |
Goodwill | 8,452 |
Purchase price consideration | $ | 16,669 |
The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Epiphany. Goodwill of $8.5 million was assigned to the Integrated Agencies Network reportable segment. Intangible assets consist of trade names and customer relationships. We amortize purchased intangible assets on a straight-line basis over their respective useful lives. The weighted average life of the total acquired identifiable intangible assets is three years. The following table presents the details of identifiable intangible assets acquired:
|  | Estimated Fair Value |  | Estimated Useful Life in Years
|  | (dollars in thousands) |  |
Customer relationships |  | $ | 3,767 |  |  | 3
Trade names |  | 549 |  |  | 3
Total acquired intangible assets |  | $ | 4,316 |  |  |
Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023. The pro forma revenue and net income (loss) for the year ended December 31, 2024 would not be materially different from the actual revenue and net income (loss) reported. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
|  | Year Ended December 31, 2023
|  | (dollars in thousands)
Revenue |  | $ | 2,570,380 |
Net income |  | $ | 42,891 |
Revenue attributable to Epiphany, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $47.4 million. Net income attributable to Epiphany, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $2.0 million. Other 2024 Acquisitions On July 19, 2024, the Company acquired L.D.R.S. Group Ltd. (“Leaders”), for 25.2 million Israeli New Shekels (“ILS”) (approximately $7 million), of which 10.9 million ILS (approximately $3 million) was paid in cash, 3.5 million ILS (approximately $1 million) in 135,010 shares of the Company’s Class A Common stock, and 10.9 million ILS (approximately $3 million) was attributed to contingent consideration which is considered part of the purchase price. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of 24.2 million ILS (approximately $7 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Leaders and expected growth related to new customer relationships. Goodwill of $4.9 million was assigned to the All Other category. The goodwill is not fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On April 5, 2024, the Company acquired PROS Agency (“PROS”), for 42.1 million Brazilian reals (“R$”) approximately $8.5 million) of which R$23.3 million ($4.7 million) was paid in cash, R$5.3 million ($1.1 million) was paid in 182,256 shares of Class A Common Stock, and R$13.5 million ($2.7 million) was attributed to contingent consideration which is considered part of the purchase price. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of R$72.5 million ($14.4 million), partially subject to continued employment, and meeting certain future earnings targets, of which a portion may be settled in shares of the Company’s Class A Common Stock, at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of PROS and expected growth related to new customer relationships. Goodwill of $5.4 million was assigned to the Communications Network reportable segment. The goodwill is not fully deductible for income tax purposes. On April 4, 2024, the Company acquired What’s Next Partners (“WNP”), for €4.3 million (approximately $5 million) in cash. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of €8.5 million (approximately $9 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of the Company’s Class A Common Stock, at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of WNP and expected growth related to new customer relationships. Goodwill of $5.4 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is not fully deductible for income tax purposes. On March 1, 2024, the Company acquired Sidekick Live Limited (“Sidekick”), for 4.6 million British pounds (“£”) (approximately $6 million) of which £3.6 million (approximately $5 million) was paid in cash, £0.1 million (approximately less than $0 million) was incurred as a certain payable to sellers, and £0.9 million (approximately $1 million) in 195,431 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of £8.0 million (approximately $10 million), subject to continued employment requirements and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was mainly recorded as goodwill, which is primarily attributable to the assembled workforce of Sidekick and expected growth related to new customer relationships. Goodwill of $2.0 million was assigned to the Communications Network reportable segment. The goodwill is not fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. 2023 Acquisitions On November 1, 2023, the Company acquired Movers and Shakers LLC (“Movers and Shakers”), a digital creative company, for $14.7 million, of which $10.2 million was paid in cash and $4.5 million in 1,006,711 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $35.0 million, subject to meeting certain future earnings targets and continued employment, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Movers and Shakers and expected growth related to new customer relationships. Goodwill of $8.2 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. On October 2, 2023, the Company acquired Left Field Labs LLC (“LFL”), a digital experience design and strategy company, for $13.2 million, of which $9.4 million was paid in cash and $3.8 million in 825,402 of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $51.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of LFL and expected growth related to new customer relationships. Goodwill of $7.9 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. On July 3, 2023, the Company acquired Tinsel Experiential Design LLC (“Tinsel”), a marketing and design company, for $2.5 million in cash consideration, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration, subject to continued employment, and meeting certain future earnings targets. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Tinsel and expected growth related to new customer relationships. Goodwill of $1.6 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. On April 25, 2023, the Company acquired Huskies, Ltd. (“Huskies”), for €5.2 million ($5.6 million) of cash consideration, of which €0.9 million ($1.0 million) is deferred, subject to post-closing adjustments. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Huskies and expected growth related to new customer relationships and geographic expansion. Goodwill of $2.6 million was assigned to the Brand Performance Network reportable segment. The goodwill is non-deductible for income tax purposes. 2023 Dispositions On October 31, 2023, the Company sold ConcentricLife (“Concentric”), which was included in Integrated Agencies Network, to a strategic buyer for $245.0 million in cash resulting in a pre-tax gain of $94.5 million. The gain was recognized within Gain on sale of business within the Consolidated Statements of Operations. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. 2022 Acquisitions The Company acquired the entities below in the year ended December 31, 2022. Pro forma revenue and net income related to these acquisitions are as follows: Brand New Galaxy The pro forma revenue and net income for the year ended December 31, 2022, was $2,698.0 million and $49.3 million, respectively. TMA Direct, Inc. The pro forma revenue and net income for the year ended December 31, 2022, was $2,691.6 million and $51.4 million, respectively. Maru Group Limited The pro forma revenue and net income for the year ended December 31, 2022, was $2,717.7 million and $36.0 million, respectively. Wolfgang, LLC. The pro forma revenue and net income for the year ended December 31, 2022, was $2,696.7 million and $51.4 million, respectively. Epicenter Experience LLC. The pro forma revenue and net income for the year ended December 31, 2022, was $2,691.0 million and $49.7 million, respectively. 9. Deferred Acquisition Consideration Deferred acquisition consideration on the Consolidated Balance Sheets consists of deferred obligations related to contingent and fixed purchase price payments, and contingent and fixed retention payments tied to continued employment of specific personnel. Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period within Office and general expenses on the Consolidated Statements of Operations. Arrangements that are contingent upon future employment are initially measured at the acquisition date fair value, remeasured at each reporting period and are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Consolidated Statements of Operations. The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Consolidated Balance Sheets as of December 31,:
| 2024 |  | 2023
| (dollars in thousands)
Beginning balance | $ | 101,058 |  |  | $ | 161,323 |
Payments (1) | (67,895) |  |  | (97,447) |
Adjustments to deferred acquisition consideration (2) | 23,005 |  |  | 14,303 |
Additions (3) | 46,598 |  |  | 22,172 |
Currency translation adjustment | (651) |  |  | 680 |
Other | — |  |  | 27 |
Ending balance (4) | $ | 102,115 |  |  | $ | 101,058 |
(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $18.2 million and $32.8 million, respectively, for the periods ended December 31, 2024, and December 31, 2023. (2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period. (3) Additions in 2024 of $46.6 million include $28.1 million related to the Company’s acquisitions (See Note 4 for further information). It also includes $17.0 million related to a reclassification from redeemable noncontrolling interest to deferred acquisition consideration in connection with the purchase of the remaining 40% interest the Company did not previously own in a certain Brand. This amount will be paid in cash in 2025. Additions of $22.2 million in 2023 represents a reclassification from redeemable noncontrolling interest to deferred acquisition consideration. Specifically, in 2021, the Company entered into an agreement to purchase the remaining 26.7% interest in Targeted Victory it did not previously own. The agreement provided for the purchase of 50% of the interest on October 1, 2021 (paid in October 2023) and 50% on July 31, 2023 (payable in October 2025). In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration in 2023. (4) The contingent and fixed deferred acquisition consideration obligation was $102.1 million and $0.0 million, respectively, as of December 31, 2024, and $57.5 million and $43.6 million, respectively, as of December 31, 2023. The deferred acquisition consideration as of December 31, 2024, and December 31, 2023, includes $38.4 million and $29.3 million, respectively, expected to be settled in shares of Class A Common Stock.

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