End of an Eras: Ardian sees Swift growth for Audiotonix after partial exit; Allied Industrial in entertainment play | PE Hub

Whether it’s sports, movies or music, private equity just can’t get enough of the entertainment sector. This morning we’re featuring a company that touches all three – Audiotonix, whose audio mixing equipment can be found at everything from Taylor Swift’s Eras tour to the Super Bowl.

Ardian has agreed to sell its majority stake in the company to PAI Partners, while retaining a minority position. We hear from Ardian’s Edward Little about how Audiotonix can grow from here and why private equity is so interested in the world of live entertainment.

We stick with entertainment for the second deal of the day, this time involving touring logistics as an Allied Industrial-backed company makes an add-on.

You Belong With Me
North American acquisitions are on the horizon for Audiotonix, a company whose audio mixing tech is used by global music superstars like Taylor Swift and Beyoncé. Ardian has just agreed to sell its majority stake in the business to fellow private equity firm PAI Partners.

PAI agreed on Tuesday to buy Ardian’s majority stake in Audiotonix in a deal valued at just under £2 billion ($2.5 billion), according to a source familiar with the matter. Ardian acquired Audiotonix in March 2020 for around £800 million, the source said. Ardian and management are retaining a minority stake.

As well as big music acts, Audiotonix sound mixing desks can be found at sporting events like the FIFA World Cup and the Super Bowl and venues such as the Las Vegas Sphere. Its portfolio of brands includes Allen & Heath, DiGiCo, Calrec, Solid State Logic, Sound Devices, Slate Digital, and Sonible. Its acquisitions over Ardian’s ownership period have also helped it move into other areas, including soundstages for television and film.

Ardian expects UK-headquartered Audiotonix to add more businesses under its new ownership, targeting geographies and end markets where its mixing consoles don’t have such a presence, Edward Little, director within Ardian’s buyout team, told me. Although its presence was roughly one-third each in Europe, the US and Asia when Ardian first bought into the company, it has some large competitors in mainland Europe and in the US, he said.

Other add-ons are likely to be in the software side of the business, specifically around audio plugins and software creation tools.

The private equity firm was particularly keen to retain a presence given the growth it expects in what it calls “experiential consumption”.

“Twenty years ago, to display your wealth you’d have a nice fancy car or you’d show off your bling watch,” said Little. “Now it’s about a square on Instagram which shows an experience that you have managed to go to, or time that you have that allows you to do these things.

“Increasingly these experiences in a live capacity are becoming more sophisticated. And for that sophistication you need higher quality audio and Audiotonix is the forefront of that. A lot of that is reflected in the touring.”

With Taylor Swift’s ongoing Eras tour the first concert tour to gross over $1 billion, according to live music trade publication Pollstar – and some central bank governors even having to play down its potential impact on inflation figures, dubbed ‘Swiftflation’ – Ardian’s decision to keep its exposure to the touring sector seems like a pretty sensible bet.

Editor’s note: We’ll be publishing the full interview with Ardian’s Little in the coming days.

On the move
Of course, it’s no good having all these superstars and audio tech if they can’t get themselves and their equipment from A to B, or arena to bowl, if you will.

Step in Celebrity Coaches, which is backed by Allied Industrial Partners and has just acquired Moonstruck Leasing, a Nashville-based entertainment coach leasing company.
Celebrity provides transportation and logistics for the live events and entertainment sector. Allied invested in it earlier this year.

“Moonstruck Leasing is the first example of our focus on add-on investments as an accelerator for growth,” said Bradford Rossi and Philip Wright, co-founders and managing partners at Allied, in a statement.

While concerts are booming, so is recorded music – at private equity thinks so. In case you missed it, check out our coverage from yesterday about a tussle between Blackstone and music publisher Concord Music – whose bid has financing from Apollo Global Management – for London-listed Hipgnosis, which owns rights to songs by artists including the Red Hot Chili Peppers, Shakira and Neil Young.

OK that’s all from me today. Chris Witkowsky will be with you tomorrow as usual for Wire

Wednesday.

Cheers,

Craig