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DEAG in advanced talks with acquisition targets, expects deals in 2024 – CEO

  • DEAG sees opportunities in European live entertainment industry consolidation
  • Company could explore re-IPO option later in the year

DEAG (Deutsche Entertainment Akiengesellschaft) is in advanced talks with several acquisition candidates and is confident of completing acquisitions this year, CEO Detlef Kornett told Mergermarket.

Headquartered in Germany, the company, which reported EUR 313.5m revenue in 2023, produces and promotes live events of all genres and sizes in Europe.

DEAG will continue to play an active role in the consolidation of the European live entertainment industry, and intends to further expand into European markets by growing in its ticketing and festivals sectors organically as well as via M&A, Kornett said.

The market is still very fragmented, and many companies have stumbled, not least because of the coronavirus pandemic, which offers DEAG attractive takeover and growth opportunities, he said.

Interesting targets include ticketing-sector players with an average EBITDA margin above 10%, and single and double-digit million revenue companies, he said. As part of its strategy, DEAG holds a majority stake in acquired companies which it plans to increase further following their successful development, he said.

DEAG has an internal team with many years of M&A experience, Kornett said.

The company has a broad financing mix at its disposal to support its growth, he said. In addition to the strong internal financing power, bank funding lines and the proceeds from last summer’s EUR 50m bond issue are also an option, he added.

In March, DEAG announced it had acquired a majority stake in UK promoter and live event organiser ShowPlanr through its UK subsidiary Flying Music, wholly owned by KMJ Entertainment.

The company has made 26 acquisitions to date, and since 2019 alone it acquired and integrated 20 targets, Kornett said. DEAG was extremely active during the coronavirus crisis to expand its position, tap into new markets and strengthen its ticketing and wants to maintain this momentum, he added.

Through its group companies DEAG has been present at 22 locations in its core markets of Germany, Great Britain, Switzerland, Ireland, Denmark and Spain, and wants to expand further, he said.

In the first three months of 2024, DEAG generated revenues of approximately EUR 52m and an EBITDA of around EUR 2.9m, according to a press release.

Re-IPO plans

DEAG will explore the option of a re-IPO on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange, possibly later this year, as soon as any acquisitions resulting from ongoing talks have been finalised, Kornett said.

The company has received positive feedback on its growth and on its new entertainment formats from many investor, he added.

Management continuously monitors the market environment and as soon as the macroeconomic and geopolitical conditions improve, it will aim for a re-IPO, he said without elaborating. DEAG was delisted in April 2021.

DEAG organises around 6,000 events every year, for which it has sold more than 10 million tickets. A steadily growing proportion of these are sold via its own ticketing platforms, myticket, gigantic.com and tickets.ie. The company has already over 30 different international festivals such as MAYDAY and Indian Spirit in Germany, Belladrum in Scotland and Sions sous les étoiles in Switzerland, Kornett said.

In June DEAG entered into a cooperation with Black Mamba, which expanded its business activities in the festival segment as planned, he said. Among other activities, Black Mamba organises the electronic urban festival Sputnik Spring Break in Eastern Germany, he added.

DEAG operates in a market characterised by comparatively very high competition, where large sector players include Evertim and Live Nation [NYSE:LYV] in addition to many smaller companies, he said.

In March this year, Kornett became sole CEO of DEAG. The company’s founder and CEO Peter LH Schwenkow stepped down and is now available to the company in a founder & senior advisor role, and will continue to be a shareholder, per a company press release.