Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals

 
Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals
IMAP   September 2017

   Live Music
   Entertainment
          Roadmap to live music entertainment
   acquisitions with a special focus on festivals
                        IMAP M&A sector report
Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals
Live Music Entertainment   Executive summary

    Live music entertainment related opportunities
    in numbers
    Favorable market environment and improving M&A

                   83%                                 3.0%                       40
          SHARE OF TOURING                        PROJECTED CAGR           AVE. ANNUAL GLOBAL
         REVENUES OF TOP 20                          2016-2020               TRANSACTIONS
           MONEY MAKERS

              INCREASING                         STRONG GROWTH             M&A ACTIVITY UP
             IMPORTANCE
                                               Total live music revenue   The two main drivers:
        Artists are now more                   will rise at a 3.0% CAGR   geographic expansion
       dependent on earnings                         through 2020,          and tapping into
           from live music                           exceeding USD           related revenue
       performance than ever                      28 billion, globally.          streams.
                before.

2   IMAP
Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals
Executive summary   TELEMATICS

Table of contents
04    Market outlook and summary

05    Drivers of live music entertainment
      market

06    Revenue streams of top artists

07    Festival industry trends

08    How to grow: acquisitions vs. organic
      growth

09    Number of acquisitions by live
      entertainment and event organization
      players

10    Universe of music event organization
      related activities

11    Transaction density by area of operation

12    Peer transaction multiples

      Case studies:
 13   Live Nation EntertainmenT
 17   CTS Eventim
 19   DEAG
 21   Ultra Music Festival
 22   Red Bull

23    Appendix

24    About IMAP

                                       IMAP                       IMAP 3
Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals
Live Music Entertainment     Outlook & summary

    Market outlook and summary

    Favorable market environment and improving M&A activity

      Total live music             For active live      In terms of number     Public transaction   The most active
      revenue is                   entertainment        of transactions, the   multiples are        investor in
      expected to                  players, diverse     outstanding results    scarce, the known    acquisitions has
      rise at a 3.0%               activity related     of 2014 might          ones range on a      been Live Nation,
      CAGR through                 acquisitions         return in 2017 and     healthy interval:    expanding further
      2020, exceeding              could be a viable    2018.                  6x-15x EV/EBITDA     into ticketing and
      USD 28 billion,              option for growth,                                               promotion.
      globally. Despite            especially in case
      the overwhelming             of investing in
      expansion of the             ticketing, venues
      digital world, live          and promoters
      entertainment                with good track
      events give fans a           records and
      type of experience           networks.
      that is unparalleled
      and engaging.

4   IMAP
Live Music entertainment - IMAP M&A sector rePort Roadmap to live music entertainment acquisitions with a special focus on festivals
Market drivers   Live Music Entertainment

Drivers of live music entertainment market

Younger revellers worldwide are seeking live performance experiences

  The world is getting younger: in 2014 1.8 billion of
  the world’s population was between 10 and 24 years

                                                                Festivals
  old - a record high - and global literacy has improved
  significantly. Combined with strong economic growth
  this drives a need for culture and entertainment
  offerings, especially in Asia and Africa.

  The appetite for physical events and venues has
                                                                definition:
  increased. The music industry has shifted to live             “Special segment of the live
  events, and revenues from live shows now surpass              music entertainment business:
  recorded music sales in some regions. In Europe,              an organized series of concerts
  ticket revenues for live music performances are now           typically held annually in the
  more than twice of recorded music sales.                      same place.”

  Festivals are an increasing asset for cultural tourism
  worldwide, and developing cultural infrastructure is
  especially important for emerging countries, which
  will attract more than half of international tourists by
  2030.

Source: IMAP, EY – Cultural Report, PWC: Global entertainment
and media outlook 2016-2020

                                                                                                               IMAP 5
Live Music Entertainment      Revenue streams of top artists

    Revenue streams of top artists
    Live entertainment is the main driver of revenues

              Taylor Swift
          Kenny Chesney
      The Rolling Stones
                 Billy Joel
            One Direction
            Grateful Dead
               Luke Bryan
                        U2
                     Adele
                Maroon 5
            Jason Aldean
            Shania Twain
    Dave Matthews Band
                Madonna
               Elton John
                      Rush
              Ed Sheeran
             JuanGabriel
     Florida Georgia Line
          Fleetwood Mac

                                                  Sales           Streaming             Publishing royalties                  Touring
                                                U.S. revenues only, Revenue from merchandising, synchronization and sponsorship is not included. Source: Billboard.com

         Touring revenues for top artists                   The total revenue of Top20 artists                           At the same time for mid-tier acts,
         are the main source of income.                     for 2015 according to Billboard’s                            that are far from this ranking,
                                                            estimates was USD 448 million.                               live performances drive sales for
                                                            On average the split was:                                    recorded music and generate
                                                               - Touring 83%                                             airplay. At their levels touring is
                                                               - Sales 11%                                               not as lucrative as for the top
                                                               - Publishing royalties 4%                                 bands, but still an obligatory
                                                               - Streaming 2%                                            exercise.

6   IMAP
Festival industry trends   Live Music Entertainment

Festival industry trends
Trends driving the future of festivals can be grouped into four sections

ARTISTS                        SOCIAL MEDIA                  TECHNOLOGY                        NEW DIMENSIONS

 Artists are turning their      Fans expect a mix of          Immersive theater, Virtual          Strong competition and
 gaze to touring to take        options and more              Reality and Augmented               festival export (e.g.
 advantage of the massive       personalized experiences      Reality will influence live         Lollapalooza going to
 jump in artist fees                                          music performances                  Berlin)
                                Social media provides
 Lack of strong headliners      hard cash benefits            Blockchain solutions                Reconsider catering
 (announcement dates            to event organizers,          may transform ticketing             options: in-house or
 are earlier: 8-9 months        especially in ticket sales    solutions and licensing             outsource, “food-line-ups”
 instead of 3-4) –              channeling                    royalty collection for              or new lines: veggie, bio,
 influenced by cheap                                          public performances                 organic, local
 airline tickets                Video content and live
                                broadcasting on mobile        Hybrid music events bring           Increasing staff numbers
 Activism (political) is        is becoming increasingly      in bigger audiences and             to secure better
 expected to revive the live    important                     more money (eg. film,               experience derived from
 music community                                              media and video games)              professionalism and
                                                                                                  security needs
 Artists are recognizing                                      Online ticketing unlocks
 the role sponsors play in                                    powerful data and                   Need to take a look
 helping to fund festivals,                                   insights like never before          at how to tackle the
 and are more willing to                                                                          challenges posed
 participate in auxiliary                                     Mobile ttechnology                  by extreme weather
 activities (Lady Gaga’s                                      improves the overall                conditions
 Dive Bar Tour, sponsored                                     attendee experience
 by Bud Light). Brands                                        (tickets, cashless                  Increase revenues from
 will become even more                                        payment and up-to-                  potential upgrades (VIP
 intertwined with artists                                     minute event guides)                and VVIP)

                                                              RFID technology and                 Niche, high-end boutique
                                                              smart cards add value               gatherings: targeting
                                                              once inside the event               the wealthier and family
                                                                                                  demographics
                                                              Live streaming events
                                                              keep fans connected and
                                                              engaged digitally

                                                                                                                          IMAP 7
Live Music Entertainment   How to grow

      How to grow: acquisitions vs. organic growth

      Expanding in the live music entertainment business has two different paths

                                                                             ORGANIC GROWTH / IN-HOUSE
                                         ACQUISITIONS
                                                                                   DEVELOPMENT

                             D
                              ecide on strategic directions incl.        ecide on strategic directions incl.
                                                                         D
      PROCESS                geographies                                 geographies
                             R
                              esearch potential targets                 Develop new content, businesses, find
                             S
                              tart negotiations                          new markets
                            Pay, manage and/or integrate                 Invest in implementation and go to
                                                                           market

                           F
                            ewer management issues as usually            lexibility
                                                                         F
      PROS                 owner remains in management role              Higher chance to reach better returns /
                           B
                            etter estimate / limit on spending           margins
                           W
                            ell established business model               Less dependent on available, good quality,
                           P
                            rofit in place – more predictable             independent businesses on sale
                           business

                           S
                            trong competition from established           ime heavy exercise for management
                                                                         T
      CONS                 players                                       Higher risk as concept is not proven
                           D
                            ifficult pricing if it has to be based on
                           poor financials

         The focus of this sector report

8   IMAP
Number of acquisitions   Live Music Entertainment

Number of acquisitions by live entertainment
and event organization players

In 2017 we see an uptick in the number of deals by industry players*

       90

       80

       70

       60

       50

       40

       30

       20

       10

        0

                        2012                   2013                  2014                   2015   2016        2017

            * Covering global transactions where percentage of acquired stake is 51% or above
            Source: Zephyr / IMAP

For this research, as opposed to taking the usual
 approach of comparing deals (e.g. targets) in the sector,
 we took a different approach and examined the activity
 of players already present in the entertainment/event
 business.

In 2014, the number of transactions executed by arts
 facility operators and convention organizers (excluding
 business/conference purpose and sports deals) peaked at
 83 yearly, based on the data provided by Bureau Van Dijk.

The most active players were Live Entertainment Group
 and Live Style Inc. (formerly SFX Entertainment Inc.).

                                                                                                                                               IMAP 9
Live Music Entertainment      Benchmarking

   Universe of music event organization
   related activities
   Live entertainment involves a wide range of businesses

                                                                 Venue operator
               Tour / concert / event                                              Ticketing (branded /
                 / festival organizer                                                   white label
                     or promoter                                                        solution)

                      Other
                                                                                                   On-site payment
                     formats
                                                                                                       solutions

                                                                 Festivals /
                                                                 Concerts /
                                                                Other events
                Artist
             management/                                                                            Mobile apps and
               agency                                                                               online solutions

                                 Equipment                                             PR & Marketing
                                                                                         (incl. Digital)

                                                                   Merchandising
                                                                    & licensing

                                                                                      See appendix for detailed description of the categories.

                he analysis of live music entertainment related
               T
               activities resulted in 10 areas or activities via which
               an industry player or outsider can enter.

               These activities range from acquisition of a
               ticketing solution to the equipment needed for
               staging a production.

               The decision should be made wisely, eg. revenue
               stream distribution could show surprising results,
               according to a German survey* 25% (!) of all
               revenues come through ticketing.

             * Berthold Seliger “Das Geschäft mit der Musik“ via DZ Bank

10 IMAP
Benchmarking   Live Music Entertainment

Transaction density by area of operation

There are clear directions that the main players follow

                                                Venue operator
            Tour / concert /                                            Ticketing (branded /
             event / festival                                                white label
              organizer or                                                   solution)
                promoter

              Other
             formats                                                                     On-site payment
                                                                                             solutions

                                                Festivals /
                                                Concerts /
                                               Other events
          Artist
       management/                                                                       Mobile apps and
         agency                                                                          online solutions

                       Equipment                                              PR & Marketing
                                                                                (incl. Digital)

                                                 Merchandising
                                                  & licensing
                                                                              Low                                        High

                                                                                          Number of examples

      After studying the value chain of the event market         We have not seen examples for enterprise level-
      and the M&A activities of large international players,     investments in:
      we have identified potential categories for expansion:       Equipment, with strong physical characteristics
        Geographical expansion and extending event                 (sound, light, stage, security and facility)
         offering via acquisition of: tour promoters, concert,      Artist management or agency
         event and festival organizers
         Taking advantage of other revenue streams in           As they are competing for live entertainment events,
        the value chain: ticketing, merchandising, PR and        it might be worth considering entering the market of:
        marketing                                                   Non-music event segment (theatre, circuses,
          New, supplementary businesses: on-site payment,           shows, comedy, discotheque)
           mobile apps and online solutions                          Sport events

      Other directions that might be relevant in the long run:
       Venue operation

                                                                                                                         IMAP 11
Live Music Entertainment       Peer transaction multiples

 Peer transaction multiples
                                                                                                                                      EV/EBITDA
 Date          Target name        Country        Target business description          Acquiror              Deal type    EV (eur m)
                                                                                                                                             (x)

 Tour / concert / event / festival organizer or promoter

 2014          Zibrant Ltd        GB             Event management services            Zebra 1234 Ltd       Acquisition          2.5          6.0
                                                                                                           100%

 2014          Kilimanjaro Live   GB             Entertainment events promotion       DEAG Concerts        Acquisition          6.7         13.7
               Ltd                               services, Live music events          GmbH                 51%
                                                 promotion services

 2012          Hammersmith        GB             Live music and performance venue     Stage C Ltd          Acquisition         23.2          6.0
               Apollo Ltd                                                                                  100%

 Ticketing

 2016          Best Union         IT             Event organisation and               Bidco                Acquisition         40.2          9.7
               Company Spa                       management services, Online                               75%
                                                 electronic ticketing services

 2014          Irec Eurl          FR             Ticketing software developer         Best Union           Acquisition          5.6          5.6
                                                                                      Company Spa          100%

 2013          Encore Tickets     GB             Theatre ticket agency operator       MBO Team – UK        100%                79.1         14.2
               Ltd

 2012          Infoconcert Sa     FR             Online ticket retailer               Digitick Sa          Acquisition          1.5          8.5
                                                                                                           100%

 2011          West End           GB             Theatre ticket booking services      Encore Tickets       Acquisition         11.0          8.6
               Theatre                                                                Ltd                  100%
               Bookings Ltd

 Other formats

 2015          Stage              NL             Theatrical and live entertainment    CVC Capital          60%                737.8         13.1
               Entertainment                     production services holding          Partners Ltd
               BV                                company                              Ambassador
                                                                                      Theatre Group Ltd

 Diversified

 2017          See Corporation    BM             Artist management services, Event    Giant Lead           Acquisition         27.4         12.0
               Ltd                               organisation services, Film and TV   Profits Ltd          increased
                                                 programme production services                             from 34% to
                                                 investment                                                100% acting
                                                                                                           in concert

 2015          Cube               KR             Artist management services,          Woori Special        Acquisition         32.1         15.3
               Entertainment                     Concert production services,         Purpose              100%
               Inc.                              Music publisher, Visual contents     Acquisition 2 Co.,
                                                 production services                  Ltd

12 IMAP
Live Nation’s current coverage   Live Music Entertainment

Live Nation’s current coverage

53 transactions made since 2006

                                                    Venue operator
             Tour / concert /                                             Ticketing (branded /
              event / festival                                                 white label
               organizer or                                                    solution)
                 promoter

              Other
                                                                                          On-site payment
             formats
                                                                                              solutions

          Artist
       management/                                                                         Mobile apps and
         agency                                                                            online solutions

                       Equipment                                              PR & Marketing
                                                                                (incl. Digital)

                                                    Merchandising
                                                     & licensing

           Number of transactions
           since 2006                                  Coverage

    As a leading player, Live Nation
    Entertainment has a remarkable
    transaction history (53 transactions since
    2006, excluding subsidiary transactions),
    mostly made in the sectors of:
      Tour promoters
       Tour / concert event / festival organizer
        Ticketing
         Mobile apps and online solutions
          PR & marketing (incl. digital)
           Merchandising & licensing

                                      Including subsidiary transactions
                                                        Source: Zephyr

                                                                                                                             IMAP 13
Live Music Entertainment     Live Nation transaction history

  Live Nation transaction history 1/3

   Date        Target name              Country      Target business description         Acquiror                      Deal type

   Tour / concert / event / festival organizer or promoter

   2017        ISLE of WIGHT            GB           Live music event operator           LN-GAIETY HOLDINGS     Acquisition unknown
               FESTIVAL                                                                  LTD                    majority stake %

   2017        BLUESTONE                IL           Live entertainment management       LIVE NATION            Acquisition unknown
               ENTERTAINMENT                         services                            ENTERTAINMENT INC.     majority stake %

   2017        CUFFE AND                GB           Artist promotion services, Events   LIVE NATION            Acquisition 100%
               TAYLOR LTD                            organisation services               ENTERTAINMENT INC.

   2017        BOTTLEROCK NAPA          US           Live rock music festival operator   LIVE NATION            Acquisition unknown
               VALLEY                                                                    ENTERTAINMENT INC.     majority stake %

   2016        SECRET SOUNDS            AU           Festivals, music agencies and       LIVE NATION            Acquisition 51%
               GROUP PTY LTD                         artists management agency           AUSTRALASIA PTY LTD
                                                     services, Music rights owner,
                                                     Musical festivals organisation
                                                     services

   2016        NOUS SAS                 FR           Music events production services    LIVE NATION            Acquisition 100%
                                                                                         ENTERTAINMENT INC.

   2016        BIG CONCERTS             ZA           Live entertainment promotion        LIVE NATION            Acquisition 51%
               INTERNATIONAL                         services                            ENTERTAINMENT INC.
               (PTY) LTD

   2016        SWEDEN ROCK              SE           Live rock festival and music        LIVE NATION            Acquisition unknown
               FESTIVAL AB                           entertainment operator              ENTERTAINMENT INC.     majority stake %

   2016        AC ENTERT-               US           Concert promoting services          LIVE NATION            Acquisition unknown
               AINMENT INC.                                                              ENTERTAINMENT INC.     majority stake %

   2014        LIVE NATION              TH           International concerts and shows    BEC-TERO               Joint venture 100%
               BEC-TERO                              promoter                            ENTERTAINMENT PCL
               ENTERTAINMENT                                                             LIVE NATION (HK) LTD
               CO., LTD

   2013        VOODOO MUSIC &           US           Music, arts and entertainment       LIVE NATION            Acquisition 100%
               ARTS EXPERIENCE                       promoter                            ENTERTAINMENT INC.

   2012        HARD EVENTS                           Music festival operator             LIVE NATION            Acquisition 100%
                                                                                         ENTERTAINMENT INC.

   2013        BDG MUSIC GROUP          EE           Live concerts promoter              LIVE NATION            Acquisition 51%
               OÜ                                                                        ENTERTAINMENT INC.

   2012        MICHAEL COPPEL           AU           Artists concert promoter            LIVE NATION            Acquisition 100%
               PRESENTS                                                                  ENTERTAINMENT INC.

   2011        FRONT LINE               US           Entertainment management            LIVE NATION            Acquisition unknown
               MANAGEMENT                            services                            ENTERTAINMENT INC.     remaining stake %
               GROUP INC.

   2009        BIG CHILL                GB           Music festival operator             LIVE NATION INC.       Joint Venture 100%
               REPUBLIC LTD                                                              GAIETY INVESTMENTS
                                                                                         LTD

   2008        LUGER INC AB             SE           Live entertainment promoter         LIVE NATION INC.       Acquisition increased
                                                                                                                from 49% to 100%

   2008        MOONDOG                  SE           Live entertainment promoter         LIVE NATION INC.       Acquisition increased
               ENTERTAINMENT                                                                                    from 25% to 100%
               AB

   2008        DF CONCERTS LTD          GB           Live music promotion services       LIVE NATION INC.       Acquisition 67%

   2008        MIRAGE                   AE           Events promoter                     LIVE NATION INC.       Acquisition 65%
               PROMOTIONS
               DUBAI

   2006        GAMERCO SA               ES           Events organisation services        LIVE NATION INC.       Acquisition 100%

14 IMAP
Live Nation transaction history   Live Music Entertainment

Live Nation transaction history 2/3
Date        Target name          Country   Target business description            Acquiror                                Deal type
2006        HOB                  US        Concert promotion services,            LIVE NATION INC.               Acquisition 100%
            ENTERTAINMENT                  Live music venues operator,
            INC.                           Restaurants operator
2006        CONCERT              NL        Concert production services            LIVE NATION INC.               Acquisition 50%
            PRODUCTIONS
            INTERNATIONAL
            INC.
2009        GREAT BIG SHOWS      US        Concerts and theatrical events         AC ENTERTAINMENT               Acquisition 100%
            LLC                            promoter, Corporate event              INC.
                                           organiser, Logistics services,
                                           Theatrical events producer
Ticketing

2017        TICKETPRO AS         CZ        Online ticket reservation platform     LIVE NATION                    Acquisition 100%
                                           operator, Ticket reservation           ENTERTAINMENT INC.
                                           offices operator
2016        TICKETHOUR SA        GR        Ticketing software developer           LIVE NATION                    Acquisition 100%
                                                                                  ENTERTAINMENT INC.
2015        FRONT GATE           US        Festival ticketing services            TICKETMASTER                   Acquisition 100%
            TICKETING                                                             ENTERTAINMENT INC.
            SOLUTIONS LLC
2015        UNIIVERSE            CA        Event ticketing platform operator      TICKETMASTER                   Acquisition 100%
            COLLABORATIVE                                                         ENTERTAINMENT INC.
            LIFESTYLE INC.

2014        SEATWAVE LTD’S       GB        Online ticket sales platform           TICKETMASTER UK LTD            Acquisition 100%
            ASSETS                         operator
2014        EVENTJOY INC.        US        Mobile event ticketing and             TICKETMASTER                   Acquisition 100%
                                           organisation application developer,    ENTERTAINMENT INC.
                                           Online event ticketing and
                                           organisation platform operator
2014        SHERPA.BE            BE        Online live event ticketing platform   TICKETMASTER UK LTD            Acquisition 100%
                                           operator
2012        FRONT GATE           US        Festival ticketing services            ANSCHUTZ                       Acquisition 100%
            TICKETING                                                             ENTERTAINMENT
            SOLUTIONS LLC                                                         GROUP INC. C3
                                                                                  PRESENTS LLC
2011        SERVITICKET SA       ES        Ticket retailer                        TICKETMASTER                   Acquisition 100%
                                                                                  ENTERTAINMENT INC.
2010        TICKETNET SAS        FR        Online event ticketing services        LIVE NATION                    Acquisition 100%
                                                                                  ENTERTAINMENT INC.
2009        TICKETMASTER         US        Online ticket reservation platform,    LIVE NATION INC.               Acquisition 100%
            ENTERTAINMENT                  Online ticket reservation services
            INC.
2008        SLO LIMITED INC.’S   US        VIP ticketing services                 TICKETMASTER GROUP             Acquisition 100%
            ASSETS                                                                INC.
2008        GET ME IN! LTD       GB        Online ticket vendors                  TICKETMASTER UK LTD            Acquisition 100%
2008        TNOW                 US        Online ticket vending services         TICKETMASTER GROUP             Acquisition 100%
            ENTERTAINMENT                                                         INC.
            GROUP INC.
2007        PACIOLAN INC.        US        Venue management and online            TICKETMASTER GROUP             Acquisition 100%
                                           ticket sale software developer         INC.

                                                                                                                                      IMAP 15
Live Music Entertainment   Live Nation transaction history

   Live Nation transaction history 3/3
   Date        Target name            Country      Target business description           Acquiror                    Deal type

   2007        EMMA                   CN           Ticketing and event promotion         TICKETMASTER GROUP   Acquisition unknown
               ENTERTAINMENT                       service provider                      INC.                 majority
               HOLDINGS HK LTD

   2006        BILETIX                TR           Online ticket sales and               TICKETMASTER GROUP   Acquisition 100%
                                                   distribution services                 INC.

   2006        TICK TACK TICKET       ES           Events tickets management and         TICKETMASTER GROUP   Acquisition 100%
               SA                                  distribution services                 INC.

   Mobile apps and online solutions

   2016        INDMUSIC INC.          US           Online independent music video        LIVE NATION          Acquisition 100%
                                                   platform operator                     ENTERTAINMENT INC.

   2015        TWO TOASTERS           US           Online iOS and Android mobile         TICKETMASTER         Acquisition 100%
                                                   application developer                 ENTERTAINMENT INC.

   2014        YOURTROVE              US           Online personalized search results    LIVE NATION          Acquisition 100%
                                                   driven by social connections          ENTERTAINMENT INC.
                                                   platform operator

   2013        MEEXO INC.             US           Mobile and social applications        LIVE NATION          Acquisition 100%
                                                   developer                             ENTERTAINMENT INC.

   2012        REXLY INC.             US           Social music mobile application       LIVE NATION          Acquisition 100%
                                                   developer                             ENTERTAINMENT INC.

   2012        NETDO                  LI           Online concert set list sharing       LIVE NATION          Acquisition 100%
               ESTABLISHMENT                       community web portal                  ENTERTAINMENT INC.

   2006        ILIKE.COM              US           Online community services             TICKETMASTER GROUP   Minority stake 25%
                                                                                         INC.

   PR & Marketing (incl. Digital)Artist management / agency

   2011        BIGCHAMPAGNE           US           Market consultancy services,          LIVE NATION          Acquisition 100%
               LLC                                 Market research services, Online      ENTERTAINMENT INC.
                                                   communities consumer data
                                                   software developer

   2007        ECHOMUSIC LLC          US           Creative positioning and branding     TICKETMASTER GROUP   Acquisition unknown
                                                   services, Entertainment marketing     INC.                 stake %
                                                   services, Music and merchandise
                                                   digital distribution services,
                                                   Online advertising services, Online
                                                   fan club

   Artist management / agency

   2008        FRONT LINE             US           Artist management services            TICKETMASTER GROUP   Acquisition 30%
               MANAGEMENT LLC                                                            INC.

   2007        SIGNATURES             US           Music and celebrity licensing and     LIVE NATION INC.     Acquisition 100%
               NETWORK INC.                        event merchandising company

  Source: Zephyr

16 IMAP
CTS Eventim’s current coverage   Live Music Entertainment

CTS Eventim’s current coverage

22 transactions made since 2006

                                              Venue operator
          Tour / concert /                                                     Ticketing (branded /
           event / festival                                                         white label
            organizer or                                                            solution)
              promoter

            Other
                                                                                               On-site payment
           formats
                                                                                                   solutions

         Artist
      management/                                                                              Mobile apps and
        agency                                                                                 online solutions

                     Equipment                                                     PR & Marketing
                                                                                     (incl. Digital)

                                               Merchandising
                                                & licensing

         Number of transactions
         since 2006                               Coverage

        CTS’s mission is to become Europe’s largest
        eCommerce ticketing provider. They are realizing
        growth potential by:
          Increasing market share - new products, such as
              sport events, theater, fairs, cinema, etc.
           Changing the value chain - new channels, such as
              kiosk systems, internet ticket shop, merchandising,
              internet advertising
            Geographical market extension -
              internationalization in Europe
             New businesses, such as access control systems,
              database marketing, event-related travel, online
              auctions, paperless tickets

                                           Including subsidiary transactions
                                                             Source: Zephyr

                                                                                                                                 IMAP 17
Live Music Entertainment       CTS Eventim transaction history

CTS Eventim transaction history
Date        Target name                   Country     Target business description             Acquiror                         Deal type

Tour / concert / event / festival organizer or promoter

2016        Medusa Music Group            DE          Electronic music and DJ concept         Medusa Music Group         Joint venture 100%
            Gmbh and Alda Holding                     promoting services                      Gmbh Alda Holding BV
            BV’s Hamburg, germany
            based joint venture

2014        Fullsteam Records OY’s        FI          Live performance and music              FKP Scorpio Sweden AB      Acquisition 100%
            fullsteam agency division                 promoting agency

2014        Holiday On Ice                NL          Ice entertainment production            Medusa Music Group         Acquisition 50%
            Productions BV                            services                                Gmbh

2013        ABC Production AG             CH          Event management services               CTS Eventim AG             Acquisition 80%

2008        Palazzo Produktionen          DE          Live concert promoter                   FKP Scorpio                Acquisition increased
            Gmbh                                                                              Konzertproduktionen Gmbh   from 51% to 100%

2006        ACT Entertainment AG          CH          Concerts and music tours organizer      Medusa Music Group         Acquisition 51%
                                                                                              Gmbh

Venue operator

2012        Arena Management Gmbh         DE          Events organization services provider   CTS Eventim AG             Acquisition 100%

Ticketing

2016        Starticket AG and             CH         Ticket Marketing Services, Ticketing     Ticketcorner Holding AG    Joint venture 100%
            Ticketcorner Holding AG                  agent                                    Starticket AG
            joint swiss ticketing group

2015        Kinoheld Gmbh                 DE         Online cinema ticket retailer            CTS Eventim AG & CO.       Acquisition 51%
                                                                                              KGAA

2014        Gtech Spa’s ticketing         IT         Ticket reservation services              TICKETONE SPA              Acquisition 100%
            business unit

2014        See Tickets Nederland BV      NL         Musical, theatre and other               CTS Eventim AG             Acquisition
                                                     performance ticketing services

2014        Entradas See Tickets SA       ES         Musical, theatre and other               CTS Eventim AG             Acquisition
                                                     performance ticketing services

2014        Top Tickets France SAS        FR         Musical, theatre and other               CTS Eventim AG             Acquisition
                                                     performance ticketing services

2014        Stage Entertainment BV’s      RU         Musical, theatre and other               CTS Eventim AG             Acquisition
            ticketing activities in                  performance ticketing services
            Russia

2013        Crea Informatica SRL          IT         Online and mobile electronic ticketing   Ticketone Spa              Acquisition 60%
                                                     marketplace platform operator,
                                                     Online and mobile electronic ticketing
                                                     marketplace software developer

2010        Ticketone Spa                 IT         Online ticketing reservation services,   Eventim Online Holding     Acquisition increased
                                                     Online ticketing reservation services    Gmbh                       from 49.824% to
                                                     platform operator                                                   99.65%

2010        See Tickets Germany           DE         Live entertainment ticketing services    CTS Eventim AG             Acquisition 100%
            Gmbh                                     provider

2010        Ticketcorner AG               CH         Ticketing agent                          CTS Eventim AG             Acquisition 100%

2009        Eventim CH AG                 CH         Ticket marketing services                CTS Eventim AG             Ringier Holding AG

2008        Lippupiste OY                 FI         Ticketing services                       CTS Eventim AG             Acquisition 65%

2008        Cardplus OY                   FI         Plastic card manufacturer, which         CTS Eventim AG             Acquisition 100%
                                                     owns a 30 per cent stake in the
                                                     Tampere-based ticketing services
                                                     company Lippupiste Oy

2006        Tictec AG                     CH         Ticketing services                       CTS Eventim AG             Acquisition 100%
DEAG’s current coverage   Live Music Entertainment

DEAG’s current coverage

9 transactions made since 2006

                                           Venue operator
          Tour / concert /                                             Ticketing (branded /
           event / festival                                                 white label
            organizer or                                                    solution)
              promoter

           Other
                                                                                     On-site payment
          formats
                                                                                         solutions

         Artist
      management/                                                                     Mobile apps and
        agency                                                                        online solutions

                   Equipment                                               PR & Marketing
                                                                             (incl. Digital)

                                             Merchandising
                                              & licensing

         Number of transactions
         since 2006                             Coverage

              EAG covers the entire value chain in the field of
             D
             Live Entertainment: from concerts via record sales,
             rights exploitation, sponsorship and merchandizing
             to ticketing.

              ocial media and digital customer communication
             S
             become increasingly important and are continuously
             extended by DEAG through its digital strategy.

                                   Including subsidiary transactions
                                                     Source: Zephyr

                                                                                                                       IMAP 19
Live Music Entertainment    DEAG transaction history

    DEAG transaction history

      Date      Target name               Country        Target business description           Acquiror                 Deal type

                                                         Entertainment events promotion
                                                                                                                        Acquisition
      2014      Kilimanjaro Live Ltd      GB             services, Live music events DEAG
                                                                                                                               51%
                                                         Concerts Gmbh promotion services

                                                                                                                         Acquisition
                                                         Concert and event organization        DEAG Deutsche               increased
      2013      Aio Group AG              CH
                                                         holding company                       Entertainment AG         from 52% to
                                                                                                                                100%

                                                                                               DEAG Deutsche
                Blue Moon                                                                                              Joint venture
      2013                                AT             Tour promotion services               Entertainment AG
                Entertainment                                                                                                  100%
                                                                                               Ms Karin Edtmeier

                Wizard Promotions
                                                                                               DEAG Deutsche            Acquisition
      2013      Konzertagentur            DE             Concert event management services
                                                                                               Entertainment AG             75.1%
                Gmbh

                Handwerker                                                                     DEAG Deutsche            Acquisition
      2013                                DE             Convert event organization services
                Promotion E. Gmbh                                                              Entertainment AG                51%

                                                                                               DEAG Deutsche
                Gold Entertainment                                                                                     Joint venture
      2010                                DE             Live concert promotion services       Entertainment AG
                Gmbh                                                                                                           100%
                                                                                               SONY Deutschland Gmbh

                Manfred Hertlein
                                                         Tour and concert organization         GOLD Entertainment       Acquisition
      2010      Veranstaltungs            DE
                                                         services                              Gmbh                         66.6%
                Gmbh

                The Classical                                                                  Ringier Holding AG      Joint venture
      2009                                CH             Classical music producer
                Company AG                                                                     DEAG Classics AG                100%

                                                                                               DEAG Deutsche
                Switzerland Classics                                                                                   Joint venture
      2008                                CH             Classical concert organizer           Entertainment AG Ms
                AG                                                                                                             100%
                                                                                               Dina Thoma-tennenbaum

    Source: Zephyr

20 IMAP
An alternative   Live Music Entertainment

An alternative:
UMF became international without acquisition
Global edition of the UMF electronic music event, 20 countries in 5 continents

                                                        Venue operator
                  Tour / concert /                                        Ticketing (branded /
                   event / festival                                            white label
                    organizer or                                               solution)
                      promoter

                    Other
                                                                                       On-site payment
                   formats
                                                                                           solutions

                Artist
             management/                                                                Mobile apps and
               agency                                                                   online solutions

                              Equipment                                       PR & Marketing
                                                                                (incl. Digital)

                                                          Merchandising
                                                           & licensing

  Original event: Ultra Music Festival held every
  March since 1999 in Miami. In 2016: 165,000
  guests, 3-day event for electronic music. Spin offs
  include:
    Ultra festivals (1+ days) – started in 2007/2008:
          Argentina, Brazil, Chile, Spain (Ibiza), Japan,
          Korea, South Africa, Miami - Ultra Beach - Croatia
          and Bali
     Road to Ultra (1-day event) – started in 2012:
          Bolivia, Chile, Colombia, Japan, Korea, Macau,
          Paraguay, Peru, The Philippines, Puerto Rico,
          Singapore, Taiwan
      ULTRA LIVE: Live stream experience - bringing
          the festival online to over 20 million unique
          viewers
       UMF FILMS: festival after movies; feature length
          documentary, UMF TV on YouTube
        UMF Radio: via mobile application and in 62
          countries on networks, 2-hour weekly shows
         Ultramerchandise.com

                                                                                                                       IMAP 21
Live Music Entertainment       An alternative

  An alternative:
  Red Bull sponsored events as competitors
  Red Bull sponsors, organizes and acquires events

         Sports                     Adventure                   Motor   Culture   Music

                                       Red Bull Media

  Red Bull has became a significant event sponsor
  and owner aiming to further strengthen its brand
  recognition. Red Bull is focusing on:
     Sport events (diving, bike, surf, skateboarding
         and other various extreme sports)
      Adventures (e.g. Red Bull Stratos);
    Motor sport events (F1, Red Bull Air Race, rally, etc.);
       Culture events and organizations (e.g. social
         platforms);
        Music.
  The Red Bull Media House is a media company
  specialized in sport, lifestyle programming, music
  and games, strengthening all Red Bull events.
  In 2007, the company launched its own record
  label Red Bull Records. The Red Bull Music
  Academy organizes music workshops and
  festivals around the world.
  Red Bull sponsors, organizes and acquires events.

22 IMAP
Appendix   Live Music Entertainment

Appendix
Universe of music event organizing related activities

   Tour / concert / event /
   festival organizers and                          Venue operator
   promoters                                         Could act as organizer,
     Organization of the events                      however most often just
      Financial concept of the tour                  lease the venue               Ticketing
       Production/ staging, venue selection                                        (branded / white label solution)
        and hiring                                                                    Access to a software based ticketing
        Marketing concept, appointment of                                             platform and the physical network
         ticket sales, etc.

  Other formats
   Non-music events:                                                                                On-site payment
    theatre, circus, comedy                                                                          solutions
   Sport events                                                                                      Necessary for cash
   Other: escape game                                                                                 substitution
    & likes

                                                     Festivals /
                                                     Concerts /
                                                    Other events
                                                                                                     Mobile apps and
 Artist management /                                                                                 online solutions
 agency                                                                                               Reach / hook target
  Supports the creative                                                                               audience
    process                                                                                            Proprietary content
   Responsible for selecting                                                                           distribution
    tour promoter

                      Equipment                                                      PR & Marketing (incl.
                       L
                        inked to the actual                                         Digital)
                       performance: sound,                                             Tap all possible revenue sources
                       stage, light
                                                     Merchandising & licensing
                       O
                        ther supporting
                                                      Tap all possible revenue sources
                       facilities, security, etc.
                                                       Good supplement to ticketing

                                                                                                                      IMAP 23
Live Music Entertainment   About IMAP

   About IMAP

          35
        COUNTRIES

      350 ADVISORS

   Argentina I Belgium I Bosnia and Herzegovina I Brazil I
   Canada I Chile I China I Colombia I Croatia I Czechia I Egypt
   I Finland I France I Germany I Hungary I India I Ireland I Italy
   I Ivory Coast I Japan I Mexico I Morocco I Netherlands I
   Norway I Peru I Poland I Russia I Senegal I Serbia I Slovenia
   I Spain I Sweden I Turkey I United Kingdom I United States

   IMAP is a global merger and acquisition advisory organization
   with a presence in 35 countries.
   IMAP closed over 2,100 transactions valued at $90bn in the last
   10 years and is consistently ranked among the world´s top M&A
   advisors (Thomson Reuters) for mid-market transactions.

   www.imap.com

24 IMAP
About IMAP   Live Music Entertainment

                         IMAP 25
IMAP                     september 2017

                            live music entertainment report authors:

IMAP                        Gábor Szendröi                 Oyvind Solvang
Phone: +34 936 026 710      IMAP Hungary                   IMAP Norway
E-mail: info@imap.com       gabor.szendroi@imap.com        oyvind.solvang@imap.com
www.imap.com
                            Gabriella Hajdu-Tar            Rade Rakočević
                            IMAP Hungary                   IMAP expert advisor
                            gabriella.hajdu.tar@imap.com
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