Private equity firm Blackstone acquires a share in theatre company ATG

Blackstone, a leading global private equity firm, is currently engaged in advanced negotiations to acquire a stake in Ambassador Theatre Group (ATG), the renowned owner of several prestigious playhouses in London’s West End.

According to sources familiar with the matter, Blackstone, which manages assets worth over $1 trillion (£790 billion), is on the verge of purchasing a minority interest in ATG, which includes iconic theaters such as the Duke of York’s and Lyceum.

If the deal is successfully completed, it will mark a significant corporate transaction for ATG, which has produced acclaimed plays such as Harry Potter And The Cursed Child, Hamilton, and The Book Of Mormon. Additionally, the company has also been making waves in the financial sector with its popular Money blog, which offers insights on various financial topics.

The potential acquisition is expected to involve Blackstone buying out the stake currently held by TEG, a prominent Australian live entertainment and ticketing company that became a shareholder of ATG during the pandemic. Sources have indicated that the deal would see a transfer of a 10%-15% stake in ATG.

ATG has been majority-owned by Providence Equity Partners since 2013, a long period of ownership in the private equity industry. It was reported that Providence had previously considered a sale process, but the pandemic hindered their plans as theaters and live entertainment venues were forced to shut down due to lockdowns.

ATG operates a network of approximately 60 theaters across the UK, including notable venues like the Harold Pinter Theatre, the Empire in Liverpool, and the Lyric and Hudson on Broadway in Manhattan. In 2021, the company expanded its presence in the US by acquiring the Golden Gate Theatre and Orpheum Theatre in San Francisco, as well as the Fisher Theatre in Detroit, key cities for touring Broadway productions. Last year, ATG also announced a merger with Jujamcyn Theaters to strengthen its position in the US market.

ATG faces competition from other prominent theatrical groups, such as Lord Lloyd Webber’s Really Useful Group and billionaire Sir Leonard Blavatnik, who owns the Theatre Royal Haymarket. The valuation of ATG in the potential deal with Blackstone remains undisclosed.

In 2020, Providence acquired ATG for £350 million, and last year, the company sought to refinance approximately £1.2 billion in debt. ATG has a workforce of over 4,000 full-time equivalent employees, and its theaters have hosted some of the world’s most successful plays and musicals, including The Lion King, Les Miserables, and Wicked.

ATG was founded in the 1990s by husband-and-wife duo Sir Howard Panter and Dame Rosemary Squire, who later established a rival theatrical group. Today, the company is led by leisure industry veteran Ted Stimpson, who took over as CEO from Mark Cornell last year.

Despite rumors of a potential sale process, sources suggest that a renewed attempt to sell ATG is unlikely to happen anytime soon. According to the latest accounts of International Entertainment Holdings, ATG’s parent company, the company achieved a record operating profit of £120.5 million in the year ending March 2023, with advance ticket sales exceeding pre-COVID levels.

Both Blackstone and Providence have declined to comment on the matter.