Music festival producer and serial acquirer SFX Entertainment Inc. (Nasdaq: SFXE) has received a proposal from its founder, Robert Sillerman, to go private.
Sillerman is offering to buy the shares he doesn't already own at $4.75 per share in cash. He currently owns 39.8 percent of the business. SFX's board of directors established a special committee to consider and negotiate the offer. The day after the offer became public, SFX's shares opened at $4.76.
The company has been making acquisitions and trying to capitalize on the popularity of electronic dance music. In September, it made a deal for Amsterdam-based Monumental Productions BV, which produces techno music events under the brand name Awakenings. Before that, the company bought Flavorus, a ticketing technology company. Last April SFX closed a deal for React Presents, a Chicago-based business that produces the Spring Awakening Music Festival and the Summer Set Music & Camping Festival.
New York-based SFX also owns Beatport, a website that offers music downloads, mixes and live DJ performances. SFX paid $50M for Beatport in 2013. For more on the company, see SFX Spree Spotlights Fast-Growing Genre.
SFX has experienced net losses and negative cash flow since the business started in 2011, according to a filing with the U.S. Securities and Exchange Commission. As of Sept. 30, the business had an accumulated deficit of $221.6 million and $83.6 million of cash on hand.
In February 2014, SFX issued $220 million in notes in a public offering to pay off debt. The company issued $65 million more in notes and a $10 million private placement. SFX also has a $30 million revolving credit facility with Barclays Bank plc, a $10 million subfacility for loans in non-U.S. dollars and a $7.5 million subfacility for letters of credit.