Thursday, July 25, 2024

KKR acquires live music giant Superstruct in $1.4bn deal (UPDATE)

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Investment giant KKR has acquired European festival operator Superstruct Entertainment from private equity firm Providence Equity Partners.

As part of the transaction, Providence has an option to invest €250 million (approx $267m) into Superstruct.

KKR is making the investment in Superstruct through its European Fund VI, an $8 billion fund that invests in the growth of “leading businesses”.

UPDATE:  An earlier version of this story reported that the deal was worth GBP £1.3 billion ($1.64bn at current exchange rates), citing a report from the Financial Times. The figure in the FT’s article has since been revised to EUR €1.3 billion, which converts to USD $1.39 billion.

Founded in 2017 with seed funding from Providence and led by former Live Nation exec James Barton, Superstruct has grown its business through strategic acquisitions across Europe and Australia.

The company now operates 80 large-scale festivals and 200 smaller events, including Wacken Open Air rock festival, plus Boardmasters and Sónar.

The FT reports that the UK-based company’s events attract 7 million people each year.

KKR said in its announcement on Friday (June 21) that “demand for live entertainment has grown significantly over the past decade and is expected to continue to expand, as consumer spending continues to shift from goods towards experience”.

It added that it plans to “support Superstruct in its next phase of development as one of the key players in a highly fragmented sector that continues to grow, expand and professionalize”.

With its investment in Superstruct, KKR said it will “draw from direct experience” working with independent music businesses, including music company BMG. (BMG and KKR announced an alliance in March 2021 to acquire and manage music copyrights.)

Goldman Sachs is acting as financial advisor and Kirkland & Ellis as legal advisor to KKR. Providence is being advised by HSBC and LionTree as joint financial advisors, and White & Case as legal advisor.

“With a robust foundation as a top-tier live entertainment platform, we see significant growth opportunities ahead for Superstruct.”

Philipp Freise, KKR

Philipp Freise, Partner and Co-Head of European Private Equity and Franziska Kayser, Partner at KKR, said: “We are delighted to partner with Roderik Schlösser, James Barton and the team at Superstruct who have established themselves as a leader in delivering unparalleled live music experiences globally.

“With a robust foundation as a top-tier live entertainment platform, we see significant growth opportunities ahead for Superstruct.

“Drawing on our strong partnership approach and experience in the digital entertainment and ticketing space, such as BMG, ProSiebenSat1, GetYourGuide, and Trainline, as well as KKR’s global resources and extensive network, we will support the company and its entrepreneurial team to bring their compelling portfolio of live event formats to a wider audience and drive further growth.”

“We are incredibly proud of the rapid growth and success Superstruct has achieved since its inception.”

Andrew Tisdale and Daniel Zwicky, Providence Equity Partners

Andrew Tisdale, Senior Managing Director and Daniel Zwicky, Director at Providence Equity Partners, said: “We are incredibly proud of the rapid growth and success Superstruct has achieved since its inception.

“With Providence’s backing, Superstruct has become a truly exceptional live entertainment company. In particular, we believe the Company’s resilience and emergence from the global pandemic as a stronger business is testament to the entrepreneurial spirit of Roderik Schlösser, James Barton and the impressive management team. We are confident that with KKR’s support, Superstruct will continue to thrive.”

“Through our development, we are a leader in the professionalization of this industry, enabling our dedicated teams to excel in a collaborative and inspiring environment and create and deliver best-in-class events for millions of fans.”

Roderik Schlösser and James Barton, Superstruct Entertainment

Roderik Schlösser, CEO and James Barton, Chairman of Superstruct Entertainment, said: “The founding vision for Superstruct was to create a natural home for successful entrepreneurs, creative visionaries, and business-minded professionals in live entertainment. We wanted to create a network of influence setting the standards for live experiences.

“Through our development, we are a leader in the professionalization of this industry, enabling our dedicated teams to excel in a collaborative and inspiring environment and create and deliver best-in-class events for millions of fans.

“We are proud to have secured the backing of KKR, whose expertise and network will strengthen our ability to scale and innovate in the vibrant experiential economy. We would like to thank Andrew Tisdale, Daniel Zwicky and the team at Providence for their outstanding support. Their belief in Superstruct has been fundamental to our success.”

 Music Business Worldwide

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