Ticketek-owner TEG seeks $700m in dividend recap; taps Goldman Sachs

afr.com:

Taylor Swift’s Australian ticket sale is over, and so is the sale process for Ticketek-owner TEG.

Street Talk understands TEG’s private equity owner, Silver Lake, has begun meeting with lenders for a dividend recapitalisation that would see it lean on debt to cut itself a cheque.

The Australian Financial Review flagged a dividend recap was under consideration in late August, after this column reported TEG’s sale had stalled despite fielding interest from two private capital heavy-hitters, Blackstone and KKR.

Tickets for Taylor Swift’s Eras tour helped Ticketek break sales records this year. AP

Sources said Silver Lake was expected to seek $600 million to $700 million in debt, starting with the US markets. It is understood to be chasing a deal at five-times leverage with only a few covenants tied to the business’s EBITDA levels.

Of note, the US private equity firm is being advised by Goldman Sachs on the recapitalisation, despite having Jefferies run the sale process.

It’s a role reversal for the Wall Street bank, given that only a few months ago it was steering one of the bidders, Blackstone, through TEG’s sale process.

However, the appointment makes sense. Goldman Sachs was one Silver Lake’s advisers when it bought TEG for about $US1.3 billion from pan-Asian investment firm, Affinity Equity Partners, nearly four years ago.

Going by its debt advisory mandate, the investment bank seems to have managed to stay in Silver Lake’s good books.

Preparations for the dividend recapitalisation come after the sale process failed to turn up a bid to Silver Lake’s liking.

The process had narrowed down to two key contenders: Blackstone, which had Goldman Sachs and King & Wood Mallesons looking at TEG for months before the auction