TPG, Fosun in the lead to acquire Cirque du Soleil

Thursday, Apr 16, 2015

A consortium of private equity firm TPG Capital LP and Chinese conglomerate Fosun International Ltd is in the final stages of negotiations to acquire Cirque du Soleil, according to people familiar with the matter.

TPG and Fosun have prevailed in an auction for the world's largest theatrical production company over a rival private equity consortium comprising CVC Capital Partners Ltd and Providence Equity LLC, the people said on Wednesday, confirming an earlier report in Canadian newspaper The Globe and Mail.

A deal is not yet final and could fall apart, the sources said. Reuters had reported last week that the two consortia were in final negotiations with the company's owner and founder Guy Laliberté.

The price that TPG and Fosun were negotiating with Laliberté could not be learned, but sources close to the process had previously stated a deal would likely value Cirque du Soleil near $1.5 billion.

Laliberté is expected to keep at least a 10 percent stake in Cirque du Soleil and continue to play a significant role in the company, one of the people said. Caisse de dépôt et placement du Québec, Canada's second-largest pension fund, plans to be minority investor in Cirque du Soleil, according to the sources.

The sources asked not to be identified because the negotiations are confidential. TPG and Providence Equity declined to comment, while Fosun, CVC, Caisse and Cirque du Soleil did not respond to requests for comment.

Best known for its acrobatic spectacles and Las Vegas shows, Cirque du Soleil has been working with investment bank Goldman Sachs Group since last year to find a strategic partner.

Founded by Laliberté and street performers in Quebec in 1984, Cirque du Soleil has become one of Canada's most famous exports. Laliberté currently owns 90 percent of the Montreal-based company.

Cirque du Soleil's shows featuring acrobats and whimsical plots tour around the world and are performed nightly in Las Vegas and other resorts. It has roughly 4,000 employees and it employs 1,300 performing artists in 50 countries, according to its website.

While the company generates the majority of its revenue from ticket sales, it also organizes private events, sells retail goods based on its shows, and licenses its brand to the hospitality and fashion industries. It has a joint venture with BCE Inc's Bell Media to create television programming, movies and games.

TPG owns most of Hollywood talent agency Creative Artists Agency, started movie and television studio company STX Entertainment, and helped take Spanish-language broadcaster and television network Univision private. Its partnership with Shanghai-based Fosun is expected to help Cirque du Soleil expand in Asia.