In 2017, The Madison Square Garden Company acquired 62.5% common equity interest in Tao Group, which is led by founders Marc Packer, Rich Wolf, Noah Tepperberg and Jason Strauss. That deal was worth $181 million. That partnership brought MSG a world-class dining and hospitality arm.
Hakkasan Group's executive team will continue to run day-to-day operations for the Hakkasan properties under the direction of Tao Group Hospitality, led by co-CEOs Noah Tepperberg and Jason Strauss.
In a statement, Strauss said, "Despite the challenges caused by the pandemic, we know there’s a real desire by people around the world to gather once again. As indoor dining and other hospitality experiences start to return to regular operations, we believe our newly combined company will be well-positioned to take advantage of this pent-up demand, setting the stage for long-term growth."
Tao Group Hospitality will retain Hakkasan’s top leadership, including Derek Silberstein, executive vice president of food and beverage; Angela Lester, evp of business development; and James Algate, evp of entertainment.
"We are thrilled to join Tao Group Hospitality, a company we’ve long admired for their leadership and innovation in entertainment, dining and hospitality. We look forward to utilizing our collective strengths to continue raising the bar for exceptional guest experiences," said Derek Silberstein, evp of Hakkasan Group, in a statement.
The newly combined company will work with MSG Entertainment to integrate experiences into an extensive portfolio of live offerings, including New York’s Madison Square Garden. MSG Entertainment is making significant progress on the construction of its Las Vegas venue, MSG Sphere, which it expects to complete in 2023.
In an exclusive interview with Billboard, Tao Group co-CEO Noah Tepperberg says that the marriage forms a true integrated entertainment company.
"We're going to provide a platform for the industry's leading artists to play from smallest to the largest venues, including what will be the No. 1 live music venue in the world, MSG Sphere, when it opens," Tepperberg says. "They can go from a venue with a 500-person capacity to a venue with a 20,000 cap and not just in Las Vegas and in New York but in a truly global way, from London to Dubai."
Artists such as Drake and Travis Scott are examples of this, and both have performed between Tao Group and Hakkasan Group venues for years.
"This builds a lifetime relationship with artists and their teams and it helps us attract the best talent,” he adds.
For Las Vegas, which is shaping its own Cinderella story on the heels of news from CDC Gaming Reports that casinos in Nevada grabbed $1 billion in revenue in March, it means that Tao Group Hospitality will now have thousands of employees in the market and add partners like Caesars Entertainment and MGM Resorts.
"It's been a interesting time to have this type of a conversation with everything going on in the world. No one was able to accurately predict what the future of businesses is going to be," Tepperberg says. "But coming out of COVID, we knew this merger would be not only powerful, but but critical. With the way the world has changed, we just felt that having a bigger group and the ability to have this scale would give us the right recipe for success. It has been a long process. The fun part starts today."
Tepperberg says 16 years ago when they opened Tao in Las Vegas, they never could have imagined where this would go. "We were kids. We thought we would go to Las Vegas, open up a place and come back to New York," he says of his business partner Strauss. "We didn't go do a million deals, we really were thoughtful. We did Tao and we followed it up with Lavo. Las Vegas has been a love story. I think it's been great to us. We're just getting started but it's an amazing new chapter for us in Las Vegas and around the world."
For the transaction, Tao Group Hospitality issued equity from one of its subsidiaries to acquire Hakkasan Group from Hakkasan USA. With the completion of the deal, Tao Group Hospitality owns a majority of the newly combined company. MSG Entertainment owns a controlling interest in Tao Group Hospitality and, as a result, also owns a controlling, indirect interest in the newly combined company.