STGW Stagwell Inc

On December 30, 2021, Stagwell Inc. (the “Company’) entered into an agreement (the “Agreement”) to purchase the remaining 49% interest in Instrument LLC not previously owned by the Company from Instrument Holdings Inc. (“Instrument Holdings”) and Instrument Leadership LLC (“Instrument Leadership” and, together with Instrument Holdings, the “Sellers”) for an aggregate purchase price of $160 million. The Agreement replaces the previous agreement between the Company and the Sellers, which obligated the Company to an uncapped future earn out payment that management believes would have exceeded the $160 million purchase price. The purchase price is comprised of $86,078,627 in cash and $73,921,373 in Class A common stock of the Company (“Stagwell Stock”) and payable in three installments. At closing of the transaction on December 31, 2021, the Company paid the first installment of $75 million, comprised of $37.5 million in cash and $37.5 million, or 4,475,653 shares, in Stagwell Stock. The number of shares was calculated based on the average closing price of the Stagwell Stock for the 30 trading days immediately prior to the date of the Agreement. The second and third installments of $42.5 million, each comprised of $24,289,313.50 in cash and $18,210,686.50 in Stagwell Stock, are payable on April 3, 2023 and April 1, 2024, respectively. The number of shares issued in each installment will be calculated based on the average closing price of the Stagwell Stock for the 30 trading days immediately prior to the payment date. Under the terms of the Agreement, the aggregate number of shares of Stagwell Stock issued in the transaction may not exceed 10% of the Company’s outstanding Class A common stock.

The issuance of Stagwell Stock to the Sellers is exempt from registration under Section 4(a)(2) of the Securities Act, as amended. The Company will receive no cash proceeds and no commissions will be paid to any person in connection with the issuance.