Vivid Seats, an online ticket resale marketplace that went public through a SPAC merger in 2021, is reportedly fielding acquisition offers from several equity firms hoping to take the company private, according to a recent report in Bloomberg. Company officials have brought on an advisory firm to help gauge interest in a potential sale, according to the report.
The acquisition buzz led to a 20% jump in the company’s share price on Dec. 30 that has held more than a week after news of a purchase first broke, closing today at $4.57 per share. Vivid Seats is based in Chicago and was launched in 2001 by Jerry Bednyak and Eric Vassilatos as a competitor to resale platform StubHub and gained popularity with fans and ticket brokers for its ease of use and high traffic. In 2017, private equity firm GTCR acquired a majority stake in Vivid Seats. A year later, Bednyak and Vassilatos left the company and went on to launch venture group Skybox Capital.
In 2021, Vivid Seats merged with Horizon Acquisition Corporation, a special purpose acquisition company (SPAC) controlled by Todd Boehly’s Eldridge Industries (a stakeholder in Billboard parent company PMC as well), and now trades on the NASDAQ under the ticker symbol SEATS. Recent SEC filings show Eldridge owns 40% of Vivid’s Class A shares. Vivid is managed by CEO Stan Chia, who joined the company in 2018.
In 2023, Vivid processed $3.9 billion worth of transactions (compared to $3.2 billion in 2022) with revenue up 19% for the year to $712 million and adjusted EBITDA up 25% to $142 million. While year-end results for 2024 won’t be available for several more weeks, a recent Citibank analyst report said the firm remains “an attractive private equity takeout candidate with a fairly robust internal rate of return.”
Vivid is believed to represent about 25% of the North American ticket market, although its market share of concert tickets is believed to be larger since 52% of its sales are linked to music and 33% come from sports, according to one analyst report. Major headwinds for the company include concerns about a cooling consumer market after several years of double-digit price increases in the concert ticket space and fears of a pending crackdown on the secondary ticketing business by federal authorities. A recent letter to the Federal Trade Commission from the National Independent Talent Organization complained that suppliers to sites like Vivid and Stubhub often deploy illegal methods for procuring ticketing inventory, including methods that violate the 2016 BOTS Act. A crackdown on suppliers violating federal law could significantly reduce the volume of sales on the Vivid website and negatively impact future revenues.
