Canada's Cirque du Soleil Sold to American, Chinese Investors

U.S. private equity firm TPG Capital acquires a controlling stake as part of a deal reportedly valued at around $1.5 billion.

Canada's Cirque du Soleil on Monday unveiled a deal to sell a controlling stake to U.S. private equity firm TPG Capital.

Terms of the overall deal, valued at around $1.5 billion according to recent press reports, were not disclosed. But Shanghai-based Fosun Capital Group will take a minority stake in the Montreal-based entertainment group as it looks to expand into China and other Asian markets.

Quebec pension fund giant Caisse de depot et placement will also acquire a minority stake in Cirque du Soleil, while billionaire founder Guy Laliberte retains a minority stake and becomes creative advisor to the foreign-owned company. Laliberte launched the global brand in 1984 and had long held a controlling stake in the privately held group.

Laliberte, 55, during a press conference in Montreal said he never intended to pass on ownership of the Cirque du Soleil to any of his five children, and so needed new strategic partners to take the company forward. Laliberte, who started out as a fire-breather before helping to launch the Montreal-based circus troupe in 1984, added he started evaluating the company's future in 2012 when around 400 layoffs were made.

He said the Cirque du Soleil was back to financial health, but he also saw the need for new investors so Laliberte could step back to pursue new personal dreams. "I really wanted to meet new challenges. And those challenges, I can't necessarily meet them through the Cirque," Laliberte told reporters.  

As part of the sales deal, Laliberte has ensured top management, including president and CEO Daniel Lamarre, remain in place at Cirque du Soleil. TPG has also made a binding commitment to keep the company's headquarters in Montreal.

In addition, Quebec businessman Mitch Garber becomes chairman of Cirque du Soleil, while taking an unspecified stake. "I have worked with TPG for many years and know they are the perfect partners to take this business forward," Garber said in his own statement.

San Francisco-based TPG has stakes in other consumer brands, including J. Crew and Neiman Marcus, and has Internet and entertainment investments that include CAA, Lynda.com, STX Entertainment and Univision. With Fosun, TPG is looking to take the Canadian-based company deeper into the Asian market.

"The performances of Cirque are very attractive and are a standard bearer for the quality content expected by global citizens," Fosun chairman Guo Guangchang said in a statement about conquering new markets.

Despite becoming a global brand on the strength of its traveling and permanent circus shows, Cirque du Soleil in recent years has diversified into film, TV and digital exploitation of its brand in partnership with Canada's Bell Media, Saban Brands and 20th Century Fox Television. The continued global expansion of Cirque du Soleil is expected to include a host of new film, TV and digital partners.

Laliberte a year ago called in Goldman Sachs & Co. to secure a buyer for the company, which has around 1,400 employees. Cirque du Soleil currently has 18 permanent or touring shows active around the world.

The transaction is expected to close in the third quarter of 2015.

April 20, 2015 10:35 a.m. Updated to include new details on the sales agreement and executive statements. 11:25 a.m. Updated with comments from Guy Laliberte given at a Montreal press conference.

 

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