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PSP Investments, Investcorp acquire minority stake in talent shop UTA

  • Why is this important: UTA is PSP’s first foray into global entertainment/media
  • PSP Investments, Investcorp buy into Hollywood talent firm
  • Deal values UTA at estimated $800 mln: Bloomberg
  • UTA group continues to hold majority of company

Public Sector Pension Investment Board and Investcorp have acquired a minority interest in United Talent Agency, a Hollywood talent business.

Terms weren’t disclosed. A source told Bloomberg the deal values UTA at about $800 million.

UTA’s partnership group, which include CEO Jeremy Zimmer and Co-Presidents David Kramer and Jay Sures, will continue to hold majority ownership.

PSP Investments and Investcorp join existing shareholder ValueAct Capital Management, a San Francisco hedge fund headed by Jeffrey Ubben. ValueAct invested in 2015.

Established in 1991 through a merger, UTA represents artists and content creators in motion pictures, television, music, digital, broadcast news, books, theater, videogames, fine art and live entertainment.

In a statement, the company said it has more than doubled in size over the past five years. Growth is due in part to acquisitions, most recently in the live speaking, electronic music, e-sports and gaming spaces.

UTA has also made strategic investments. They include Core Media Group, now called Industrial Media, which last year relaunched American Idol.

UTA is PSP’s first deal in the global entertainment and media industry.

In an interview with Buyouts, Simon Marc, PSP head of private equity, said the pension system’s long-term investment will accelerate UTA’s strategic initiatives in an industry that is “seeing double-digit growth.”

Marc said industry dynamics are influenced by the emergence of technology and multiple new players, which are accounting for much of the growth, especially in live and original content.

With the backing of PSP and Investcorp, UTA can drive consolidation in key content verticals, he added.

The new investors will also help the company go head-to-head with top competitors.

They include Creative Artists Agency, acquired four years ago by TPG, and WME Entertainment, which is backed by Silver Lake PartnersCanada Pension Plan Investment Board and GIC.

PSP Investments and Investcorp were advised in the UTA deal by Credit Suisse, Gibson Dunn & Crutcher and Sidley Austin.

Overseeing C$153 billion ($118 billion) in assets, PSP is Canada’s fourth largest pension system.

Since 2015, PSP has significantly ratcheted up deployments to private equity, much of it earmarked for direct investing. PE portfolio assets currently total C$19.4 billion, more than half of which reflect direct holdings.

UTA is PSP’s second deal with Bahrain’s Investcorp.

Two years ago, PSP and Caisse de dépôt et placement du Québec partnered with Investcorp in an investment in specialty consultant AlixPartners. The deal valued the business at $2.5 billion.

Marc has led PSP’s PE group since 2015, when he joined from Permira.

Action Item: Reach United Talent Agency in Beverly Hills: +1-310-273-6700