As COVID-19 reshapes our economy, our newsletter will help you unpack the news from the day.
This week’s mergers and acquisitions news involves a former fire breather, acrobats, contortionists and a group of high-flying private equity firms.
Cirque du Soleil, the no-animals, highly stylized performance troupes with shows around the world will be sold for $1.5 billion Canadian, a little over $1.2 billion U.S.
That’s a long way from its origins.
Founder Guy Laliberte, “was a fire-breather and a busker who played an accordion,” says New York Times reporter Ian Austen, who reported on the sale Monday. “It started as a kind of hippie commune with pay-as-you-want shows.”
A grant from the provincial government of Quebec helped launch the company into its much wider renown and success. Fast-forward a few decades, and there’s still a lot of local pride tied up in the company’s success.
“Quebec is a pretty small place and [Laliberte] is literally one of six billionaires who live in the province, so it’s hyper, hyper sensitive. Plus, they’re a big employer in Quebec,” Austen says.
The company is privately held and keeps its financials close to the vest, but it insists it’s profitable, despite financial hurdles that were exacerbated in 2008.
“[Laliberte] had kind of pulled back to literally go off into space in a Soyuz capsule,” Austen says. “For the first time in their history, 25 years at that point, they had shows that fizzled out.”
Laliberte returned in 2012 and began implementing aggressive cost controls. Four hundred employees were laid off, and shows that weren’t working out were cut. The phenomenon that started as a ragtag group of street performers had grown unchecked since its founding in 1985. It was time for financial discipline and focus.
Rather than gut the company further, Cirque du Soleil hopes the infusion of cash and influence from private equity will pull back the curtain on the biggest market it’s yet to tap: China.
“What this is ultimately about,” Austen says, “is to find a successful way into the Chinese market to take advantage of the growing middle class there.”
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