The deal highlights the growing demand for shareholder services in the era of rising investor activism
MDC Partners announced on February 19 its acquisition of a majority partnership interest in Kingsdale Shareholder Services, the leading Canadian proxy solicitation firm based in Toronto. Kingsdale is renowned for its role in supporting Pershing Square Capital Management successful campaign against the board of Canadian Pacific Railway in 2012.
The deal was likely in the works for a little while, but a cover story about Kingsdale’s founder and CEO, Wes Hall, in the February issue of The Globe and Mail may have helped convince MDC to expedite it.
Kingsdale is netting roughly $50 million from the partnership, plus a payment that will depend on how well the company performs down the road, as reported by an anonymous source in the New York Times. MDC intends to help Kingsdale expand in the United States, to which end MDC’s chairman and CEO, Miles Nadal ‘has already drafted a letter to 40 or 50 potential new clients for Kingsdale,’ according to the Times article. MDC is based in New York but has offices in Toronto as well.
MDC is a network comprised of over 50 marketing and communications firms. The arrangement with Kingsdale is its first involvement with proxy solicitation services, demand for which has increased as shareholder activism becomes more popular. MDC spent more than $500 million buying agencies between 2008 and 2012, according to the Times story.
Kingsdale's expertise in providing customized strategic advice regarding proxies, M&A opportunities, investor relations and crisis communications to clients across North America complements the know-how of a newly formed financial communications and strategic advisory group within MDC Partners that includes Allison+Partners, Bryan Mills Iradesso, HL Group, Kwittken + Company, Luntz Global and Sloane & Company, according to a statement by MDC Partners.
Unlike its role in the Canadian Pacific Railway proxy contest, Kingsdale’s business focuses mostly on defending companies from shareholder activists. Its clients include Goldcorp, Scotiabank, Xstrata and Brazilian mining giant Vale.
