SFX Entertainment, the music company led by the media executive Robert F. X. Sillerman, is looking to raise up to $175 million through an initial public stock offering, with a pitch to investors on the growing popularity of electronic dance music.
In a prospectus filed this week with the Securities and Exchange Commission, SFX calls itself the largest live event producer focused on “electronic music culture,” which it defines as “a global generational movement driven by a rapidly developing community of avid followers among the millennial generation.” According to one recent industry report, the global market for this music will reach $4.5 billion this year.
The offer is being underwritten by UBS Investment Bank, Barclays and Jefferies, according to the prospectus. An initial price was not listed, but the company said it had applied to Nasdaq under the symbol SFXE.
Electronic dance music, or E.D.M., has been a subculture mainstay for decades. But over the last few years it has turned into the music industry’s fastest-growing sector, driven by the popularity of huge festivals like Ultra and Electric Daisy Carnival, and by the dance-driven sound of top pop acts like Lady Gaga and Rihanna.
The trend has led to an investment rush on dance companies, most of them independent groups far from the world of corporate finance. Live Nation Entertainment, the dominant concert company, has acquired a number of top promoters over the last two years. Recently it bought half of Insomniac, the company behind Electric Daisy and other events; terms of the deal were not disclosed, but were reported to value the company at about $100 million.
Mr. Sillerman transformed the live music business in the 1990s by acquiring dozens of regional rock promoters to create a national concert network, which he sold to Clear Channel Communications in 2000 for $4.4 billion. That business became the basis for the concert division of Live Nation.
Mr. Sillerman returned to music last year with stated plans of spending $1 billion to amass a new empire focused on dance music. So far his acquisitions include all or the majority of IDT, the company behind the festivals Tomorrowland and Sensation; Beatport, an online music store; the promoter Disco Donnie Presents; and MMG, a nightclub company in Florida. The prospectus says that SFX is also in the process of buying Made Event, which presents the Electric Zoo festival in New York.
According to SFX’s submission, its holdings had $242 million in revenue last year, and a net loss of $48.9 million. The company has $64.5 million in debt.
The company says it will start more festivals and develop media content for its properties, but in the prospectus it also points out the popularity its festivals already enjoy. Tomorrowland, for example, “sold out all of its approximately 180,000 tickets to the 2013 festival in Belgium in one second.”
Article source: http://www.nytimes.com/2013/06/28/business/media/sfx-entertainment-files-for-ipo.html?partner=rss&emc=rss
Speak Your Mind
You must be logged in to post a comment.