Los Angeles-based middle market investor Ares Management has teamed with New York-based JP Morgan Partners in a $110 million (€90.4 million) recapitalisation of entertainment venue company House of Blues.
Ares is investing $30 million in preferred and common stock, with JP Morgan providing an additional $5 million. Banc of America takes up the rest in a $75 million bank credit facility, with $40 million in a funded term loan, and the remaining $35 million in an undrawn revolving credit facility.
House of Blues Entertainment is headquartered in Los Angeles, and operates seven 1,000 to 2,000 capacity clubs in the US that are used for live music performances. In addition, the House of Blues Concerts division owns, operates or exclusively books arena and amphitheatre venues throughout North America.
According to Ares partner Eric Beckman, the influx of capital should allow the company to go forward with a growth plan that includes the rollout of additional House of Blues clubs, which all feature a music hall, restaurant, bar and a VIP space. Beckman said there has been great demand for the branded entertainment clubs across North America, Western Europe, and even certain parts of Asia.
“The demographic for music is ever-growing,” Beckman said. “Twenty years ago, you wouldn’t find many 60- and 70-year olds going to these shows, but today, you do. These are people who love music, and live music is very important to them.”
Ares Management, which has more than $4.5 billion in assets under management, makes its private equity investments through the Ares Corporate Opportunities Fund. The firm provides flexible junior capital to middle market companies, with a particular focus on companies that are undercapitalised, in order to grow the business and deleverage the balance sheet. Earlier this month, Ares agreed to acquire intimate apparel maker Maidenform.