New York-based JP Morgan Partners and Los Angeles-based Ares Management have agreed to sell entertainment venue operator House of Blues Entertainment to Live Nation, the largest concert promoter in the US, for $350 million (€275 million).
Neither JP Morgan or Ares would comment on the transaction, but sources close to the deal said both firms expect to see a return of almost 3 times their initial equity investment. The two private equity investors led a $110 million recapitalisation of the company in 2004.
As part of the deal Live Nation will acquire House of Blues’ ten signature nightclubs in such cities as Las Vegas and Chicago, as well as its eight ampitheaters around the country. The company would not say whether it would consolidate the businesses of the two companies.
Ares invested $30 million in preferred and common stock in the March 2004 recapitalisation, and JPMorgan provided an additional $5 million. Bank of America provided the debt financing via a $75 million bank credit facility.
Ares Management, which makes its private equity investments through the Ares Corporate Opportunities Fund, is an independent investment firm with over $7 billion in capital under management. JPMorgan Partners will soon be spinning off from JPMorgan and will be renamed CCMP Capital. The complete separation of CCMP Capital from its parent should be complete by the end of 2006.