Exponent takes to the stage with £90m deal

Exponent Private Equity, the UK mid-market investor, is providing “at least” £75 million (€83.8 million; $123.9 million) of the financing for Ambassador Theatre Group’s £90 million takeover of rival Live Nation’s UK operations.

The deal gives Exponent a majority stake in the combined entity, which is valued at around £150 million and becomes one of the UK’s largest theatre groups.

The new group has 39 venues and 11,000 theatre seats in London’s West End. It brings together ATG’s historic Duke of York and Piccadilly theatres with Live Nation’s Lyceum and Apollo Victoria. Venues outside London include the Liverpool Empire and Edinburgh Playhouse.

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“We’re buying into a growing market,” Chris Graham, who led the deal on behalf of Exponent, told PEO. “ATG has continued to grow through the recession, recording like-for-like growth of 7 percent per annum. There is increasing demand for live entertainment.” He added that the scale of the new firm made it “a one-stop-shop for producers, making it easier to schedule tours around the country”.

Graham added that Exponent was backing “real entrepreneurs” in the form of husband and wife team Howard Panter and Rosemary Squire, who launched their first venue in Woking, Surrey in 1992. In the year to November 2008, ATG made a gross profit of £35 million against a pre-tax loss of £635,000.

Part of the financing for the deal is being raised from shareholders including Greg Dyke, the former BBC director general, who becomes executive chairman of ATG, and Peter Beckwith, the property entrepreneur.

Graham says now is a “good time” to be doing new deals from a valuation viewpoint and that “there is more realism in the market”. Exponent is investing from its second fund, which closed on £805 million in January 2008.