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Broadway.com and related assets being sold for $45 million
Tue, Dec 29th 2009 5:54 pm EST
By Alfred Branch Jr.
Hollywood Media Corp. (HMC) announced today that it's selling its Broadway ticketing division, which includes Broadway.com, to Key Brand Entertainment, Inc. (KBE) for cash, stock and other concessions that total about $45 million.
Broadway.com sells tickets to shows on Broadway and London's West End, and also offers package deals for hotels and restaurants, and it reports on theater news. In addition to Broadway.com, KBE will also receive Theatre Direct.
According to HMC, "the transaction will consist of cash of $20 million (subject to a working capital adjustment), a five-year second lien secured promissory note from Key Brand in the initial principal amount of $8.5 million at an interest rate of 12 percent per annum, a warrant for Hollywood Media to purchase 5 percent of the common stock of Theatre Direct at an exercise price of $0.01 per share, an earnout of up to $14 million contingent upon reaching certain revenue targets, and the assumption of $1.6 million in certain seller liabilities." The sale will allow HMC to concentrate on its core Hollywood-related movie and ticketing businesses.
KBE is one of the world's leading producers of theatrical entertainment and a major player in the Broadway and West End theater scenes. The company is also in the midst of a lawsuit against Live Nation over the sale of several Live Nation theaters to Ambassador Theatre Group.
In a statement, KBE Chairman Thomas B. McGrath and CEO John Gore said they are pleased by the acquisition. "We welcome all of the employees joining us through this transaction, and we are pleased that President and COO Matt Kupchin and Executive Vice President of Ticketing Jerome Kane will continue in their current roles. We are excited by the inherent possibilities of this venture. Broadway.com provides preeminent service to the theatergoer and producer alike. We look forward to the growth and expansion of our businesses. The site has become a fixture and a necessity in the world of theater."
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