Only weeks after HOB CEO Greg Trojan told Billboard that he did not see a sale of his company happening, Live Nation has entered into a definitive merger agreement to acquire HOB Entertainment, Inc. for an aggregate purchase price of $350 million. The transaction is expected to close by the end of the year.
HOB operates 10 venues under the House of Blues brand in cities such as Las Vegas, Los Angeles, Chicago and Orlando, and eight amphitheaters in cities including Atlanta, Toronto, San Diego and Dallas.
Already the largest venue operator and concert promoter/producer in the world, Live Nation is now even bigger, with more than 50 sheds and a thriving club network. Live Nation reported $1.3 billion in grosses in 2005, HOB $245 million. For the mid-year, LN has reported $623 million, HOB $126 million.
This is the largest transaction since the days of promoter consolidation that greeted the new millennium, and the biggest move since Live Nation spun off from its parent, Clear Channel Communications, and became a free-standing company late last year.
Live Nation recently acquired a controlling interest in the touring division of Michael Cohl’s Toronto-based Concert Productions International and a 50% interest in CPI’s Grand Entertainment division.
Live Nation has kicked the tires of HOB in the past when the latter had its concert division on the block twice in the past three years. The clubs were never in play in the past, according to Trojan, who recently expressed to Billboard an enthusiastic commitment to the concert business.
“We put it behind us,” Trojan said of selling its concert division. “We truly are enthusiastic about how the business is performing and what we see as the future. I wouldn’t rule out anything, but I don’t see [a sale] happening.”
The deal heralds a new, acquisitive posture for Live Nation since spinning off from parent Clear Channel Communications and evolving from its previous incarnation, Clear Channel Entertainment.
“We definitely felt one of the advantages of spinning on our own and being our own free-standing public was it would unlock value for the shareholders and allow us to be very nimble and focused on building this business,” Live Nation CEO Michael Rapino tells Billboard.biz.
“One of the advantages of Live Nation versus vs. Clear Channel Entertainment is I have been very clear on our intent to focus on our global music business and venue platform, whereas historically we might have dabbled in a lot of live entertainment businesses,” Rapino continues.
As for the future of HOB talent buyers, venue managers and executives, Rapino says “Right now it’s ‘business as usual’ until we close this, and at the right time we’ll meet with all their staff and determine how we’ll all merge together.”