How this affects Graceland and it's operations remains to be seen.
Private-equity firm to buy the parent of Memphis-based Elvis Presley Enterprises
From wire and staff reports
Originally published 08:37 a.m., May 10, 2011
Updated 10:12 p.m., May 10, 2011
Updated 10:12 p.m., May 10, 2011
The New York-based company that owns Graceland and the rights to the name and image of Elvis Presley, as well as other entertainment companies, is being sold for about $511 million in cash.
A private-equity group led by Apollo Global Management announced Tuesday that it is buying CKx, which operates Graceland, Presley's iconic Memphis home, and has proprietary rights to the "American Idol" and "So You Think You Can Dance" brands.
This isn't the first time an Apollo deal touched Memphis. Five years ago, it bought then-Memphis-based Harrah's Entertainment and a unit of International Paper.
The CKx board and The Promenade Trust, a group that benefits Lisa Marie Presley and is the company's partner managing the Elvis Presley name, support the deal, as does Robert F.X. Sillerman, the company's largest shareholder with a nearly 21 percent stake.
A cash tender offer is expected to start soon and expire in 20 days.
It was unclear Tuesday what consequence the deal may have for Graceland, Elvis Presley Enterprises and Memphis.
Apollo wouldn't comment Tuesday about any specific plans, in part because the sale has not become final, an Apollo spokesman said.
The private-equity firm buys underperforming companies using borrowed money, takes action to increase their value, and later attempts to sell them for more.
It's conceivable that Apollo would be better positioned to carry out a $250 million plan by CKx -- announced in 2007 but mothballed -- to expand Graceland's visitor center and add shops, attractions and a new hotel.
"Clearly this company has deep pockets," Kevin Kane, president of Memphis Convention and Visitors Bureau, said of Apollo.
Graceland is a powerful piece of the CKx portfolio Apollo acquired, he said.
"We're certainly hoping they will take a good, hard look and listen to experts that run Elvis Presley Enterprises locally," Kane said, "and continue on with some of the enhancements we think will take Graceland to the next level.
"The goal is: How do we get Graceland to go from 650,000-700,000 to over 1 million visitors a year? How do we invest to get a return on annual basis of 30 percent in added visitors?"
Elvis Presley Enterprises already has invested money in property acquisition and demolition of old apartment complexes.
"I can almost assure you they are going to continue down the path considering all the work that's been put in it thus far," City Councilman Harold Collins said.
Whatever happens with Graceland, the city will pursue a $45 million improvement of a 2.5-mile section of Elvis Presley Boulevard stretching from Brooks Road to Shelby Drive, Collins said. The project would include $1.8 million from the city and the rest in federal and state money.
While Apollo wouldn't address specific issues like improvements to Graceland, Aaron J. Stone, a senior partner of Apollo said in a prepared statement: "CKx owns a portfolio of irreplaceable assets that present a strong foundation on which to build an exciting future."
Apollo is managed by partners Leon Black, Joshua Harris and Marc Rowan. The firm has been involved in a number of major deals, including two involving Memphis companies.
In 2006, an affiliate of Apollo acquired Memphis-based International Paper's coated and supercalendered papers business for $1.4 billion, creating Verso Paper.
It also joined with TPG Capital that year to acquire Harrah's Entertainment for $27.4 billion. The gaming company's headquarters were subsequently moved to Las Vegas; in November, the company was renamed Caesars Entertainment Corp.
CKx reported net income of $7.2 million in the first quarter, or 8 cents per share, compared to a net loss of $5 million, or 5 cents per share, a year ago.
Revenue fell 20 percent to $53.3 million from $66.6 million, last year.
A private-equity group led by Apollo Global Management announced Tuesday that it is buying CKx, which operates Graceland, Presley's iconic Memphis home, and has proprietary rights to the "American Idol" and "So You Think You Can Dance" brands.
This isn't the first time an Apollo deal touched Memphis. Five years ago, it bought then-Memphis-based Harrah's Entertainment and a unit of International Paper.
The CKx board and The Promenade Trust, a group that benefits Lisa Marie Presley and is the company's partner managing the Elvis Presley name, support the deal, as does Robert F.X. Sillerman, the company's largest shareholder with a nearly 21 percent stake.
A cash tender offer is expected to start soon and expire in 20 days.
It was unclear Tuesday what consequence the deal may have for Graceland, Elvis Presley Enterprises and Memphis.
Apollo wouldn't comment Tuesday about any specific plans, in part because the sale has not become final, an Apollo spokesman said.
The private-equity firm buys underperforming companies using borrowed money, takes action to increase their value, and later attempts to sell them for more.
It's conceivable that Apollo would be better positioned to carry out a $250 million plan by CKx -- announced in 2007 but mothballed -- to expand Graceland's visitor center and add shops, attractions and a new hotel.
"Clearly this company has deep pockets," Kevin Kane, president of Memphis Convention and Visitors Bureau, said of Apollo.
Graceland is a powerful piece of the CKx portfolio Apollo acquired, he said.
"We're certainly hoping they will take a good, hard look and listen to experts that run Elvis Presley Enterprises locally," Kane said, "and continue on with some of the enhancements we think will take Graceland to the next level.
"The goal is: How do we get Graceland to go from 650,000-700,000 to over 1 million visitors a year? How do we invest to get a return on annual basis of 30 percent in added visitors?"
Elvis Presley Enterprises already has invested money in property acquisition and demolition of old apartment complexes.
"I can almost assure you they are going to continue down the path considering all the work that's been put in it thus far," City Councilman Harold Collins said.
Whatever happens with Graceland, the city will pursue a $45 million improvement of a 2.5-mile section of Elvis Presley Boulevard stretching from Brooks Road to Shelby Drive, Collins said. The project would include $1.8 million from the city and the rest in federal and state money.
While Apollo wouldn't address specific issues like improvements to Graceland, Aaron J. Stone, a senior partner of Apollo said in a prepared statement: "CKx owns a portfolio of irreplaceable assets that present a strong foundation on which to build an exciting future."
Apollo is managed by partners Leon Black, Joshua Harris and Marc Rowan. The firm has been involved in a number of major deals, including two involving Memphis companies.
In 2006, an affiliate of Apollo acquired Memphis-based International Paper's coated and supercalendered papers business for $1.4 billion, creating Verso Paper.
It also joined with TPG Capital that year to acquire Harrah's Entertainment for $27.4 billion. The gaming company's headquarters were subsequently moved to Las Vegas; in November, the company was renamed Caesars Entertainment Corp.
CKx reported net income of $7.2 million in the first quarter, or 8 cents per share, compared to a net loss of $5 million, or 5 cents per share, a year ago.
Revenue fell 20 percent to $53.3 million from $66.6 million, last year.
No comments:
Post a Comment