Providence Equity Bets on Live Event Rebound With Nederlander-ATG Theater Deal

Private equity giant Providence Equity Partners is betting on the rebound of the live event business, backing Ambassador Theatre Group’s acquisition of high-end venues in San Francisco and Detroit.

The deal calls for International Entertainment Holdings Ltd, parent company of U.K.-based ATG, to acquire the San Francisco’s Golden Gate Theatre and Orpheum Theatre and Detroit’s Fisher Theatre. The pact includes the programming operations of the historic Detroit Opera House and arts venue Music Hall. Financial terms of the deal were not disclosed.

Mark Cornell, CEO of ATG, emphasized the importance of San Francisco and Detroit as touring markets for Broadway and West End productions. ATG was formed in 1992 and today owns more than 50 prominent West End theaters, Broadway’s Lyric and Hudson theaters as well as venues in Germany, Texas, New Orleans, Boston and Brooklyn.

“This extraordinary portfolio of venues located in San Francisco and Detroit, two of America’s key theatrical touring cities, is comprised of precious assets and we are delighted to be taking over their stewardship,” he said. “We look forward to providing the best of Broadway’s shows to their loyal following when the theatres re-open in 2021.”

Providence Equity acquired ATG for about $500 million in 2013; last June the firm invested another $50 million to help ATG through the pandemic shutdown. In September, ATG also got an estimated $221 million cash infusion from TEG, a fund backed by investment firm Silver Lake.

Andrew Tisdale, senior managing director at Providence, said its faith in ATG had not waned despite pre-pandemic rumors in 2019 that the PE heavyweight was looking to sell ATG for about $700 million.

“Our continued support of and investment in ATG, and in these venues, reflects our deep conviction in the value of live theatre,” Tisdale said. “The Nederlander family has a long history of promoting the best in live entertainment and we are excited to be bringing these wonderful venues and venue teams into the ATG family. We want to continue to expand ATG’s presence in the United States and know that audiences in San Francisco and Detroit will enjoy for many years the high-quality programming that ATG will help bring to these landmark venues.”

Nederlander Co. had operated the San Francisco and Detroit venues as in-house “owned theaters” for more than 60 years. San Francisco’s Golden Gate venue was built in 1922. The Orpheum followed in 1926. Detroit’s Fisher Theatre was finished in 1928 and renovated by Nederlander as a legit theater in 1961.

“These unique venues have been home to Broadway’s greatest shows, serving local and regional audiences for generations,” said Robert Nederlander Sr. “We are confident that the ATG team will continue to look after the strong foundation that we have created with these theaters in their respective communities and to take them into this next decade with great success.”

The transaction was orchestrated by Lisbeth Barron, chairman-CEO of Barron International Group, which served as financial advisor to Nederlander. Legal advisors for Nederlander were Skadden Arps Dykema Gossett. FTI Consulting served as ATG’s financial advisor. Weil, Gotshal & Manges and Foley & Lardner were legal advisors to ATG.

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