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Acquisitions and Dispositions | 3 Months Ended
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Mar. 31, 2025
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 |  | $ | 2,723 |
Accounts receivable, net |  | 9,354 |
Other current assets |  | 575 |
Right-of-use lease assets |  | 5,911 |
Fixed assets |  | 429 |
Identifiable intangible assets |  | 36,833 |
Other assets |  | 140 |
Accounts payable |  | (2,808) |
Accruals and other liabilities |  | (6,998) |
Advance billings |  | (951) |
Current portion of lease liabilities - operating leases |  | (1,071) |
Long-term lease liabilities - operating leases |  | (5,400) |
Deferred tax liabilities, net |  | (10,500) |
Other liabilities |  | (406) |
Net assets assumed |  | 27,831 |
Goodwill |  | 34,583 |
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 $34.6 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 |  | 9,333 |  |  | 5
Total acquired intangible assets |  | $ | 36,833 |  |  |
The pro forma revenue and net loss of the Company for the three months ended March 31, 2024, was $683.2 million and $3.6 million, respectively. The unaudited pro forma financial information is 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. Revenue attributable to Unicepta, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025, was $12.4 million. Net loss attributable to Unicepta, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025, was less than $0.1 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 $58.6 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. On January 29, 2025, the Company paid $0.1 million to the sellers as a post-closing adjustment. 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 |  | 16,687 |
Purchase price consideration |  | $ | 82,846 |
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 $16.7 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 |  |  |
The pro forma revenue and net income of the Company for the three months ended March 31, 2024, was $685.0 million and $2.6 million, respectively. The unaudited pro forma financial information is 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. Revenue attributable to Consulum, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025, was $12.8 million. Net income attributable to Consulum included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025, was $0.2 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 |  |  |
Revenue attributable to Epiphany, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 was $10.9 million and $13.4 million, respectively. Net income attributable to Epiphany, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 was $1.3 million and $0.1 million, respectively. 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 $0.2 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. On February 12, 2025, the Company paid £0.3 million (approximately less than $0.3 million) to the sellers as a post-closing adjustment and for the settlement of a certain payable to sellers as noted above. 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 $2.2 million was assigned to the Communications Network reportable segment. The goodwill is not fully deductible for income tax purposes. 6. Deferred Acquisition Consideration Deferred acquisition consideration on the Unaudited Consolidated Balance Sheets consists of deferred obligations related to contingent purchase price payments and 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 Unaudited Consolidated Statements of Operations. Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Unaudited Consolidated Statements of Operations. The following table presents changes in deferred acquisition consideration for the three months ended March 31, 2025 and the year ended December 31, 2024 and a reconciliation to the amounts reported on the Unaudited Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 :
| 2025 |  | 2024
| (dollars in thousands)
Beginning balance | $ | 102,115 |  |  | $ | 101,058 |
Payments (1) | (16,103) |  |  | (67,895) |
Adjustments to deferred acquisition consideration (2) | 6,657 |  |  | 23,005 |
Additions (3) | — |  |  | 46,598 |
Currency translation adjustment | 608 |  |  | (651) |
Ending balance (4) | $ | 93,277 |  |  | $ | 102,115 |
(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $18.2 million for the year ended December 31, 2024. (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 3 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 was fully paid during the three months ended March 31, 2025. (4) The deferred acquisition consideration as of March 31, 2025, and December 31, 2024, includes $42.4 million and $38.4 million, respectively, expected to be settled in shares of Class A Common Stock.

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