Ryman Hospitality is planning to add a legendary Austin property to its music portfolio. On Thursday, Nashville-based Ryman closed a public stock offering that raised money for its planned $275 million acquisition of Block 21, a mixed-use property that includes the 2,500-seat Austin City Limits Live at the Moody Theater, the home of the long-running live music television show.
The offering netted Ryman $283 million for three million shares at $85 per share, after underwriting discounts and related expenses. Ryman plans to use $134 million of the net proceeds for the cash portion of the purchase price, according to a press release. Block 21’s current owner, Stratus Properties, revealed that the purchase price includes roughly $142 million of existing mortgage debt that Ryman will assume. The deal is expected to close in the first quarter of 2010.
Ryman shares dropped 5.1% on Nov. 11 as investors considered the diluting effect of an additional three million shares on the market. Even with a slight dip, Ryman’s shares are up 30.6% year to date through Friday (Dec. 13).
Country music is a small part of Ryman’s business. Ryman is a real estate investment trust that generated about 88% of its revenue from its Gaylord hotels and resorts (through the first nine months of 2019). Ryman owns the Grand Ole Opry and the Opryhouse venue; legendary country radio station WSM AM; two venues in downtown Nashville, the iconic Ryman Auditorium and Wildhorse Saloon; and Ole Red, a venue/bar/restaurant created with country singer Blake Shelton. Ryman’s country music properties generated just 12% of its revenue in the first nine months of 2019.
The deal strikes a humorous note as Nashville and Austin are often at odds with one another. Nashville is the buttoned-up home of country music, but a number of country artists, from Willie Nelson to Steve Earle, left Nashville and taken refuge in Austin. Singer-songwriters such as Robert Earl Keen and Lyle Lovett are from Austin; guitar legend Stevie Ray Vaughan, too. And Austin’s country music artists — the Texas red dirt scene — have little overlap with Nashville’s country music machine.
But Block 21 seems like a sensible fit for Ryman’s portfolio of hotels and entertainment properties. Austin City Limits is not genre-specific — nor is the Ryman Auditorium for that matter. And, like Nashville, Austin — the self-proclaimed “Live Music Capital of the World” — attracts visitors through festivals, concerts and conventions.