On August 31, 2020,
MDC Partners Inc. (the “Company”) issued a press release announcing that the Company had filed a registration statement,
including a management proxy circular, with the Securities and Exchange Commssion (“SEC”) pursuant to which the Company
proposes to change its jurisdiction of incorporation from the federal jurisdiction of Canada to the State of Delaware (the “U.S.
Domestication”). A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company filed
with the SEC a registration statement on Form S-4 that includes a proxy statement of the Company (the “Proxy Statement”
and, together with the Form S-4, the “Proxy Statement/Prospectus”). The Company plans to mail the Proxy Statement/Prospectus
to its shareholders in connection with the votes to approve certain matters in connection with the transaction.
INVESTORS AND SECURITYHOLDERS OF THE COMPANY ARE URGED TO READ
CAREFULLY THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION IN ITS/THEIR ENTIRETY (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) OR ANY DOCUMENTS WHICH ARE INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED U.S. DOMESTICATION. You may obtain, free of charge, copies of the Proxy Statement/Prospectus
and other relevant documents filed by the Company with the SEC, at the SEC’s website at www.sec.gov. In addition, investors
and securityholders may obtain free copies of the Proxy Statement/Prospectus and other relevant documents filed by the Company
with the SEC from the Company’s website at www.mdc-partners.com.
This communication does not constitute an offer to buy or exchange,
or the solicitation of an offer to sell or exchange, any securities, nor shall there be any sale of securities in any jurisdiction
in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any
such jurisdiction. This communication is not a substitute for any prospectus, proxy statement or any other document that the Company
may file with the SEC in connection with the proposed transaction. No money, securities or other consideration is being solicited,
and, if sent in response to the information contained herein, will not be accepted.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of the U.S. Securities Act of 1933, as amended. The transaction and distribution of this document
may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred
to herein should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute
a violation of the securities laws of any such jurisdiction. No offering of securities will be made directly or indirectly, in
or into any jurisdiction where to do so would be inconsistent with the laws of such jurisdiction.
The Proxy Statement/Prospectus was not filed by the Company
with any securities regulatory authority in Canada and no such securities regulatory authority has either approved or disapproved
the contents of the Proxy Statement/Prospectus or this news release.
Participants in the Solicitation
The Company and their respective directors and executive officers
and other members of management and employees, may be deemed to be participants in the solicitation of proxies from the Company’s
shareholders with respect to the approvals required to complete the proposed transaction. More detailed information regarding the
identity of these potential participants, and any direct or indirect interests they may have in the proposed transaction, by security
holdings or otherwise, is set forth in the Proxy Statement/Prospectus filed with the SEC. Information regarding the Company’s
directors and executive officers is set forth in the definitive proxy statement on Schedule 14A filed by the Company with the SEC
on May 26, 2020 and in the Annual Report on Form 10-K filed by the Company with the SEC on March 5, 2020. Additional information
regarding the interests of participants in the solicitation of proxies in respect of the Special Meeting is included in the Proxy
Statement/Prospectus filed with the SEC. These documents are available to the shareholders of the Company free of charge from the
SEC’s website at www.sec.gov and from the Company’s website at www.mdc-partners.com.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain forward-looking statements
(collectively, “forward-looking statements”) within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the U.S. Exchange Act and the United States Private Securities Litigation Reform Act of 1995, as amended,
and “forward-looking information” under applicable Canadian securities laws. Statements in this document that are not
historical facts, including statements about the Company’s beliefs and expectations and recent business and economic trends,
constitute forward-looking statements. Words such as “estimate,” “project,” “target,” “predict,”
“believe,” “expect,” “anticipate,” “potential,” “create,” “intend,”
“could,” “should,” “would,” “may,” “foresee,” “plan,” “will,”
“guidance,” “look,” “outlook,” “future,” “assume,” “forecast,”
“focus,” “continue,” or the negative of such terms or other variations thereof and terms of similar substance
used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors,
including those outlined in this section. Such forward-looking statements may include, but are not limited to, statements related
to: future financial performance and the future prospects of the Company’s business and operations; the Company’s potential
combination with a subsidiary of The Stagwell Group; information concerning the Company’s domestication to Delaware (the
“U.S. Domestication”); the anticipated benefits of the U.S. Domestication; the likelihood of the U.S. Domestication
being completed; the anticipated outcomes of the U.S. Domestication; the tax impact of the U.S. Domestication on the Company and
the shareholders of the Company; the timing of the special meeting to approve the U.S. Domestication; the shareholder approvals
required to effect the U.S. Domestication and regulatory and stock exchange approval of the U.S. Domestication; the anticipated
effective date of the U.S. Domestication; and the timing of the implementation of the U.S. Domestication.
These forward-looking statements are subject to various risks
and uncertainties, many of which are outside the Company’s control. Important factors that could cause actual results and
expectations to differ materially from those indicated by such forward-looking statements include, without limitation, the risks
and uncertainties set forth under the section entitled “Risk Factors” in the Proxy/Prospectus, and under the
caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2019
under Item 1A and in the Company’s Quarterly Report on Form 10-Q for the six-months ended June 30, 2020 under Item 1A. These
and other risk factors include, but are not limited to, the following:
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an inability to realize expected benefits of the U.S. Domestication or the occurrence of difficulties in connection with the U.S. Domestication;
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adverse tax consequences in connection with the U.S. Domestication for the Company, its operations and its shareholders, that may differ from the Company’s expectations, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company’s determination of value and computations of its tax attributes may result in increased tax costs;
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the occurrence of material Canadian federal income tax (including material “emigration tax”) as a result of the U.S. Domestication;
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the impact of uncertainty associated with the U.S. Domestication on the Company’s business;
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direct or indirect costs associated with the U.S. Domestication, which could be greater than expected;
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the risk that a condition to completion of the U.S. Domestication may not be satisfied; and
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the risk of parties challenging the U.S. Domestication or the impact of the U.S. Domestication on the Company Debt.
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You can obtain copies of the Company’s filings under its
profile on SEDAR at www.sedar.com, its profile on the SEC’s website at www.sec.gov or its website at www.mdc-partners.com.
The Company does not undertake any obligation to update any forward-looking statements as a result of new information, future developments
or otherwise, except as expressly required by law. All forward-looking statements in this communication are qualified in their
entirety by this cautionary statement.