BUDAPEST U.S.-based private equity firm Providence Equity Partners has bought a 70 percent stake in Hungarian festival company Sziget, the companies said on Friday, aiming to expand the events internationally.
Sziget draws about 500,000 people every year to its flagship event in Budapest and thousands more to half a dozen other festivals around Hungary. Now in its 25th season, it has received several "best festival" titles from the European Festival Awards.
Rhode Island's Providence, which has total assets of about $47 billion under management, expects to build a portfolio of about eight to 10 festivals in a few years, said Paul Bedford, a Providence representative.
"This was a cornerstone acquisition for us," Bedford said. "We have in mind a federation of festival brands. They will work together as much and as often as they want to. There is some strength in numbers in this game."
The companies did not disclose a purchase price.
The new investors will take the Sziget brand global, they said. In Hungary, the firm has controlled more than half of the local festival market, but international growth was too expensive, Sziget founder and co-owner Karoly Gerendai said.
"Now we can dream big," Gerendai, whose team will retain a 30 percent stake in the company, told a news briefing.
The current management will retain management rights and operational control of the festivals of the Sziget brand.
The team will be supported by several international festival promoters such as James Barton, former president of electronic music for Live Nation and founder of Creamfields Festival.
Providence participates in sponsorship agreements of the Formula One car race series, and has other stakes in businesses from sports to entertainment, opening new synergies for Sziget, Gerendai said.
Sziget had total revenue of about 10 billion forints ($34.6 million) in 2015, and Gerendai told the daily Vilaggazdasag last year that he expected 2016 revenues to be higher, with an EBITDA of around 1 billion forints in 2016.
(Reporting by Marton Dunai; Editing by Alison Williams)