CAA Takes Out $75M Add-On Loan

The Hollywood Sign - H 2015
Courtesy of RexUSA

The proceeds will go toward the agency’s ongoing acquisition strategy, among other business purposes.

CAA has taken on a $75 million loan from Bank of America Merrill Lynch, Credit Suisse, Mizuho and UBS.

The add-on loan will be used in part for future acquisitions, although the loan wasn’t taken out with a specific major purchase in mind. CAA has added a half-dozen companies over the past 18 months, including licensing agency Fermata Partners and experiential marketing firm PGW as well as Inside Sports and Entertainment Group, Beyond Sports & Entertainment and Goviva, which combined in June to form the agency’s new full-service hospitality division, CAA Premium Experience.

In addition to being used for general business purposes, the loan also is expected to help pay down CAA’s outstanding balance on its revolving credit facility. The agency increased its total debt to around $600 million when private equity firm TPG Capital became its majority owner last October.

Debt is increasingly an issue in the Hollywood talent agency wars. CAA rival WME borrowed a significant chunk of the $2.4 billion it paid to absorb sports and fashion powerhouse IMG, a move that CAA president Richard Lovett has criticized (though CAA was a bidder for IMG).