Maxxcom, the acquisitive Toronto holding company, has been quietly put up for sale.
Canada's largest marketing-services company has 21 affiliates including U.S. agencies Margeotes|Fertitta + Partners and Crispin Porter + Bogusky.
Goldman Sachs is said to be handling the search. (John P. Curtin, a managing director of Goldman Sachs in New York, is a Maxxcom board member.)
Sources said Maxxcom is looking primarily for new investment capital. But outside investors and potential bidders, who have been briefed, insist all of Maxx com is on the block.
Maxxcom, which derives 70 percent of its revenue from the U.S., has been hit by the economic slowdown here. With a stock-market capitalization of about $27 million, the com pany, which also carries $57 million in debt and $32 million in earn-out liabilities, may be a hard sell.
Maxxcom executives declined to discuss any recapitalization initiatives. "I don't comment on rumors," said Beverley Morden, company president and CEO.
Maxxcom typically acquires a minority stake in entrepreneurial firms, with investments in the U.S., Canada and the U.K. The company provides its "partners" with fi nancial resources and operational autonomy in exchange for a share of the profits. Miami-based CP+B, in which Maxxcom bought a 49 percent stake in January, recently said it is opening a Los Angeles outpost, thanks to Maxxcom's financial help. Despite earn-outs still to come, CP+B principals said they're not worried about the future of the partnership. "I'm definitely not concerned about Maxxcom," said agency chairman Chuck Porter.
Last year, Maxxcom was spun off of MDC Corp., a publicly-traded Toronto-based check printer and credit-card producer. MDC still holds on to 76 percent of its sibling's shares. That lim ited float has kept trading down and investors away. Maxxcom is trading at around $.98 (C$1.55), off from its 52-week high of $7.62 (C$12.00).
In September, MDC brought in Toronto merchant banker James Johnson as its new president. At the time, MDC CEO Miles Nadal said Johnson's mandate includes "reducing costs in [MDC's] operations and divesting our non-core businesses."