Maxxcom, the largest marketing services holding company in Canada, has reportedly been put up for sale.
The Toronto-headquartered holding company, which has interests in America and the UK as well as its native Canada, has been affected by the economic downturn in the US, which accounts for 70% of its revenue. Although sources have suggested the company is merely looking for new sources of investment capital, potential bidders from outside insist that they have been informed the whole of Maxxcom is up for grabs.
The group has 21 affiliates, among them US shops Crispin Porter & Bogusky and Margeotes/Fertitta & Partners. Its usual modus operandi is to buy minority stakes in firms, which are then provided with financial assistance and operational independence in return for a cut of the profits.
However, Maxxcom may not prove an easy sell – its market capitalization is $27 million, but it brings with it $57m of debt plus $32m in earn-out liabilities.
The group was spun off last year from cheque printer and credit card manufacturer MDC Corporation, which retains a 76% holding but has been seeking to divest its peripheral businesses.
News source: Adweek.com