Academy Music Group chief exec John Northcote decided that LN-Gaiety’s purchase of more than half of the venue chain was the right time for him to sell his stake in the business.
But he intends to carry on heading up AMG and is already hinting that the new company structure will allow him to speed up his search for more venues.
His 12 percent share has gone to Simon Moran’s Manchester-based SJM Concerts along with Bob Angus and Paul Hutton’s London-based Metropolis Music, which means the companies now have 44 percent of AMG between them.
LN-Gaiety bought 44 percent of the stock from RJD Partners’ investment group, but Denis Desmond’s Dublin-based Gaiety Investments already had a 12 percent share.
"It appeared the obvious time to do it," Northcote told Pollstar. "There would be no guarantees that I’d find a buyer at the time I wanted to sell, and apart from that, I’ve reached an age when I suppose I should be putting a little bit behind me."
Northcote founded AMG when he used equity backing, mainly from RJD, to orchestrate a £33.5 million management buyout of the old McKenzie Group in 2004. Desmond, SJM and Metropolis – the other main shareholders – were happy to back it.
The LN-Gaiety deal, which values AMG at £58.1 million, hasn’t come without sacrifice for the American-Irish partnership Live Nation chief Michael Rapino and Desmond set up to buy Mean Fiddler Music Group in 2005.
The CC blocked LN-Gaiety’s initial approach for Academy on the grounds that it would provide too much control of London’s mid-sized venue market. The CC stalled the deal until Paul Latham, president of the company’s U.K. music and venues operation, could hive off a couple of rooms.
Latham was particularly unhappy about losing The Apollo, where he worked for 12 years and has many close colleagues among its current staff. As a condition of the deal, those employees will transfer to MAMA.
"The venues that we are acquiring are among the best in the world," Rapino said in a March 30th company statement.
"AMG has one of the strongest live music venue brands in the U.K. The acquisition of AMG will enable us to grow our U.K.venue network with a brand that music fans know and love."
It brings in some world-famous flagship buildings including The Brixton Academy and Shepherds Bush Empire, plus a network of regional outlets dotted around the U.K. including Birmingham, Glasgow, Newcastle, Liverpool, and Bristol – with two more coming in Oxford and Brighton.
The deal may also be the springboard for further talks between LN-Gaiety and MAMA or other parties regarding some of the other smaller Mean Fiddler Music Group outlets acquired following the 2005 purchase of the Vince Power-run empire.
Fringe and boutique rooms with capacities of less than 1,000 don’t really fit the LN-Gaiety business profile. There’s little doubt Latham would have happily let them go and hung on to the Apollo if it was enough to keep the CC happy.
MAMA co-chief exec Dean James, also a former Mean Fiddler chief exec, knows the outlets so well that his company is always likely to be in the frame as a potential purchaser. However, others are likely interested in a £7.5 million job-lot of London venues or in cherry-picking individual ones.
James and his AIM-listed company have the management of U.K. acts including Franz Ferdinand and Kaiser Chiefs and assets including the Channelfly rock venue business. It is known to be looking to expand.
Last summer MAMA made an unsolicited all-shares bid for the beleaguered Sanctuary Music Group, another AIM-listed outfit, but had it knocked back because the London-based company’s board said it wasn’t worth taking seriously.
MAMA and LN-Gaiety, through Live Nation, are both stock-listed companies, so any negotiations would likely be conducted under the same veil of secrecy as the Apollo and Forum talks, and would probably take at least three months.