Kohlberg & Co. LLC has agreed to purchase the majority stake in MarketCast LLC, a data analytics provider servicing the entertainment industry, from RLJ Equity Partners LLC and State Street Global Advisors.
Los Angeles-based MarketCast offers data insights and research advisory services to help optimize marketing strategies for content such as television spots, movie trailers, print advertisements and more. The target has clients in the entertainment industry consisting of Hollywood production studios, over-the-top programmers, and broadcast and cable networks. MarketCast got its start helping Hollywood marketers figure out how to turn movies like “The Silence of the Lambs” and “Dances with Wolves” into box office success stories, according to the company’s website.
RLJ, which made its investment in Nov. 2014, and SSGA both hold a stake in the marketing research firm. Boston-based SSGA is the investment management arm of State Street Corp. (NYSE: STT) with approximately $2.4 trillion in assets under management. RLJ is a middle market investment firm based in Bethesda, Maryland that targets investments in the hotel, private equity, financial services and entertainment industries. The firm was founded by BET (Black Entertainment Television) founder Robert L. Johnson. In the summer of 2016, the media mogul partnered with Roth Capital Markets to form a new investment bank called RLJ Capital Markets. In October, AMC Networks Inc. (Nasdaq: AMCX) invested $65 million in RLJ Entertainment Inc. (Nasdaq: AMCX), and in 2014 RLJ’s real estate arm bought the DoubleTree Grand Key Resort in Key West, Florida.
Headquartered in New York, Kohlberg is a middle-market private equity firm with more than $5 billion in committed capital. Since its inception in 1987, the firm has completed 69 platform investments and more than 150 add-on acquisitions in companies across industries such as industrials, healthcare services, business and financial services, and consumer products. Kohlberg will explore growth opportunities through organic and strategic acquisitions.
Data analytics and software companies have received strong interest from dealmakers recently. For example: Sutherland Global Services Inc.’s purchasing venture capital-backed Nuevora, a provider of context-predictive insights for industries including retail, entertainment, travel and more; HGGC’s acquisition of online marketing research company Instantly; and New Mountain Capital’s investment in JDA Software Group, a data software developer that allows retailers to manage logistics and inventory.
Lazard Middle Market is acting as financial adviser to MarketCast, while DLA Piper LLP and Stroock & Stroock & Lavan LLP are serving as legal counsel. Ropes & Gray LLP is serving as legal counsel to Kohlberg. The deal is expected to close by November 2016.