It's Official: CAA Sells Majority Stake to TPG Capital
The private equity firm's increased investment makes it the agency's first outside majority owner
TPG Capital has raised its ownership stake in CAA from 35 percent to more than 50 percent, The Hollywood Reporter has learned less than a week after talks were first reported.
Exact terms of the added investment were not disclosed. The private equity firm's initial investment in the agency, in October 2010, primarily bolstered CAA's then-emerging areas of business, notably its sports practice, which has now become an industry leader. This time, the money is expected to be distributed for further growth throughout the agency's various divisions, from its traditional talent representation to its corporate marketing practice.
Rival sources thought that the shift in ownership would signal the departure of some key partners, but nearly all expected president Richard Lovett to remain. CAA said in a joint statement that its management team would extend long-term contracts: "We are excited about expanding the ways we serve clients and taking advantage of countless new opportunities as technology, content, brands, sports and media converge. TPG is an invaluable partner in the ongoing execution of our plan, providing their vast business-building expertise, unparalleled global network, and ready access to capital for further growth. With TPG's increased investment in our vision, we have never been more inspired by the possibilities that lie ahead."
As TPG becomes the first outside majority owner in the agency's history, rumors of an initial public offering for CAA will only intensify. (Silver Lake became majority owner of rival WME when it financed the agency's acquisition of IMG this year.) TPG's four-year relationship with CAA so far already belies the notion of a quick exit, some sources note, but the agency's increasing diversification of its business — it also co-founded the investment bank Evolution Media Capital, manages its own venture fund and has steady revenue-generating television packages — have put it in a stable position to go public, should that be TPG's goal.
"There's nothing like CAA," TPG co-founder Jim Coulter said in a statement. "CAA is an unrivaled industry leader, with an exceptionally talented and uncommonly stable management team. They have built their global and diversified platform through relentless innovation and a collaborative culture of client service. The company has had extraordinary growth across its divisions, alongside intelligent asset-building and principal investment strategies, and we are enthusiastic about the continued success ahead."
Oct. 20 11:14 a.m. Corrected to clarify nature of TPG's initial and added investments and updated with statements from both parties.