SFX Entertainment (Nasdaq: SFXE) founder Robert F. X. Sillerman is taking the company private in a $774 million transaction after increasing his initial take-private offer from February.
New York-based SFX produces live events and digital entertainment content focused on electronic dance music. The company owns the Tomorrowland, TomorrowWorld, Mysterland, Sensation, Stereosonic, Electric Zoo, Disco Donnie Presents, Life in Color, Rock in Rio, Nature One, Mayday, Decibel, Q-Dance, Awakenings and React Presents festivals.
Sillerman, who owns 37.4 percent of SFX, offered $4.75 percent for the shares of SFX that he didn't already own in February. The increased offer values the shares at $5.25. In a separate offer, Sillerman also offered $10 million to buy a stake in Wetpaint, a subsidiary of another company he started, Viggle (Nasdaq: VGGL).
The latest proposal includes a 45-day go shop period, during which SFX can solicit other offers. If it finds another bidder, Sillerman will receive a $7.8 million deal termination fee.
SFX has made a slew of acquisitions over the past few years in a move to capitalize on the popularity of electronic dance music. In September, SFX bought Monumental Productions BV, which produces techno music events under the brand name Awakenings. Before that, the company bought ticketing technology company Flavorus. In April 2014, the company closed a deal for React Presents, the owner of the Spring Awakening Music Festival and the Summer Set Music & Camping Festival. In February 2014, SFX bought a stake in Rock in Rio, a festival franchise, and in December 2013 bought Paylogic, another ticketing company. SFX also acquired festival producer ID&T, music download and DJ-mix site Beatport, Arc90, Fame House and Tunezy in 2013. For more on the company's acquisitions, see SFX Spree Spotlights Fast-Growing Genre.
Moelis & Co. LLC and Steptoe & Johnson LLP advised SFX's special committee on the deal. Jefferies & Co. is Sillerman's adviser, and Fried Frank Harris Shriver & Jacobsen is providing legal advice.