MDC Partners may have finally found its buyer.

The holding company and Stagwell Group announced that they reached a preliminary, non-binding agreement in principle for a potential merger of the two companies. Both parties are now proceeding with standard due diligence and documenting for the deal, though they could not offer any assurances to the likelihood of obtaining necessary consents, when they might be obtained or when a business combination might close.

As a result of the agreement, MDC intends to withdraw a previous application to change the jurisdiction it is incorporated in from Canada to the U.S. state of Delaware, as it expects the official move to the U.S. to occur as part of the proposed deal.

Stagwell, a private equity firm focused on investments in marketing, was founded by Mark Penn, who is currently its president and managing partner in addition to being MDC’s CEO. It previously invested $100 million into MDC around the time Penn took over the CEO role in March last year, and had publicly proposed the business combination in June. MDC formed a special council to explore the proposal in July.

Even prior to the pandemic, MDC was facing ongoing financial struggles, regularly reporting quarterly revenue declines and actively seeking potential buyers for some or all of its assets in recent years. Since Penn took over, the holding company has worked towards a reorganization plan, which has been characterized by grouping its agencies into their own networks to both encourage cross-office collaboration and provide efficiencies operationally.