July 10, 2017 / 2:28 PM / a year ago

LPC: Cirque du Soleil shells out US$66m for Blue Man Productions

NEW YORK, July 10 (Reuters) - Cirque du Soleil paid US$65.5m to acquire Blue Man Productions, the company behind the popular live performance Blue Man Group, according to two sources.

The acquisition was formally announced on July 6, but financial terms were not disclosed.

The purchase price represents a multiple of 16.5 times Blue Man’s last 12 months’ adjusted Ebitda of around US$4m, made up mostly of cost savings the circus arts entertainment company expects to realize from the acquisition, the sources said.

However, Cirque strips out from the purchase price the value of certain assets including real estate it plans on selling, which brings the multiple down to 10.9 times, one of the sources said. On that basis, the implied valuation is around US$44m.

Financing was sourced from a US$85m add-on to the company’s US$635m term loan due in July 2022 that was arranged last month by RBC Capital Markets. The incremental loan was upsized from US$65m initially, with the additional proceeds earmarked for general corporate purposes, according to Moody’s Investors Service.

Including the new debt, Cirque is now levered 3.8 times first lien and 4.65 times total, based on US$185m of combined pro forma last 12 months’ adjusted Ebitda, US$710m in first lien debt and US$860m in total debt.

That’s up from leverage of 3.5 times first lien and 4.3 times total prior to the purchase, based on around US$181m of Ebitda, US$625m in first lien debt and US$775m in total debt.

Montreal-based Cirque has been majority owned by TPG, Fosun Capital and Caisse de depot et placement du Quebec since 2015.

Spokespeople for Cirque du Soleil, TPG and Blue Man Productions declined to comment. (Reporting by Andrew Berlin; Editing By Lynn Adler)

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