Private Equity Buys Cirque du Soleil


April 21, 2015

Private equity firms are known to go after deals in the traditional sectors like property, healthcare and technology, but Monday saw an exciting deal made in the circus industry. The founder of the world’s most known circus companies, Cirque du Soleil, announced he has sold a majority stake in the company to US private equity firm TPG.


Guy Laliberté, the founder of the creative circus group, told in a news conference he found selling to the private equity firm to be the best opportunity for the group to continue to thrive. The group was founded in 1984 and almost 160 million customers have viewed its circus shows in over 330 cities and 48 countries.


Details of the Deal
The deal will see Laliberté hold on to a minority stake, as well as continue to provide strategic and creative advice for the group. Furthermore, Chinese investment firm Fosun Group and a Quebec pension fund manager the Caisse de depot will continue to have minority stakes in Cirque du Soleil.


The private equity firm will hold the majority stake. Financial details of the deal were not disclosed. The New York Times cited a person close to the matter who told the newspaper the transaction could be valued around $1.23 billion. The sale is expected to be finalised during the third quarter of the year.


Laliberté told in the official statement, “After 30 years building the Cirque du Soleil brand, we have now found the right partners in TPG, Fosun and the Caisse to take Cirque du Soleil forward to the next stage in its evolution as a company founded on the conviction that the arts and business, together, can contribute to making a better world.”


Tough Times
Many newspapers have previously reported the circus company is facing tough financial situation, although Laliberté denies this. According to CTV News, Laliberté said the company still manages to sell 11 million tickets a year globally, so any financial problems reported are unfounded.


Nonetheless, the group has had a difficult time with investors in the past. In 2008, Dubai-based investors, Nakheel and Istithmar World Capital, bought a stake in Cirque du Soleil to help the group fund its international expansion. But the financial crisis caused the investors to fail delivering the funds, forcing Laliberté to buy back the 20% stake.


TPG to Provide More Growth
The private equity firm is focused on helping the group to grow. David Trujillo, partner at TPG, told in the statement, “We are excited about the opportunity to bring our global platform of resources and know-how to proper the growth of Cirque’s unique brand, content and capabilities around the world.”


The private equity firm is especially focused on increasing the group’s growth opportunities in market such as China. The firm has strong media and entertainment relationships, which will come in hand in boosting Cirque du Soleil’s revenue opportunities.


The private equity firm has previously been a key component in building brands like J. Crew and Neiman Marcus.  It is interesting to see where the private equity firm takes the magnificent circus group next.


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