Online ticketing platform ETix has paid $16.5m (£12.6m/€14.2m) for the acquisition of ExtremeTix, Amplify reports.
The purchase will be a 100 per cent cash buyout of ExtremeTix’s outstanding stock, which is set to be paid in two phases. Etix will pay an initial cash payment of $13m for the company, with up to $3.5m in a second-phase payment.
Etix’s technology platform processes more than 50 million tickets per year in 40 countries, including successfully supporting some of the industry’s largest and most complex on-sales.
The negotiations were led by private equity firm Parthenon Capital Partners, which, it has been announced, has committed growth investment to Etix.
“With the addition of Parthenon as our capital partner, we see acquisition, as well as organic growth, as an opportunity to continue to strengthen our business,” Travis Janovich said in a press release.
“Acquiring other ticketing companies with complementary customer bases and technology systems and partnering with their management teams and employees creates an opportunity for additional growth for both Etix as well as the partner businesses.”
The second phase of the buy-out will be based on an earn-out of additional revenue in 2017 over 2016, with $2 paid for every $1 increase, capped not to exceed $3.5m.
“The timing of this transaction could not be better,” ExtemeTix officials wrote in a letter to shareholders, Amplify reports.
“For ExtremeTix to be able to continue to grow into a profitable business would have required a great deal more capital than we were able to raise.”
Meanwhile, Etix announced growth investment from private equity firm Parthenon Capital Partners earlier this week. The partnership allows Etix to expand through its access to necessary capital.
The deal marks the first time Etix has taken on institutional funding as it has been independently profitable since 2004.
“Our new partnership with Parthenon will allow Etix to continue its growth trajectory and continue to build upon our history of industry leading customer service and innovation,” said Janovich.
“This transaction is a testament to our employees’ hard work, dedication and commitment to focusing on our customers and building our business. We are excited to have found a partner who shares our commitment to building the industry’s most robust and flexible event ticketing platform.
“This is an important period in the ticketing industry’s evolution and we are excited to have the opportunity to invest even more aggressively in eTix’s growth and expansion.”
While not mentioning ExtremeTix in the statement, the company said it plans to grow through acquisitions.
“With the addition of Parthenon as our capital partner, we see acquisition, as well as organic growth, as an opportunity to continue to strengthen our business,” said Janovich.
“Acquiring other ticketing companies with complementary customer bases and technology systems and partnering with their management teams and employees creates an opportunity for additional growth for both eTix as well as the partner businesses.”
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