Real Live synergy

Bain to use indie in big acquisition plans

NEW YORK — Bain Capital, the Boston investment firm buying Live Entertainment Inc., plans to “aggressively pursue synergistic acquisition opportunities” in the entertainment industry using Live as a platform, according to an SEC filing made by Live late last week.

Live said it had been informed by Bain and Chicago investor Alan Gordon, who are partners in the acquisition, that they believe “the company is an attractive acquisition candidate on both a stand-alone basis and as a platform for the acquisition of additional entities in the entertainment industry.”

As reported (Daily Variety, April 11), Bain’s interest originally had been to merge Live with October Pictures and discussions also canvassed the inclusion of Trimark Holdings in the deal. In the end, however, Bain was beaten by Universal Studios in bidding for control of October and the discussions with Trimark appear to have ended.

Bain Capital has made no public statements about its rationale for buying Live so the statements in the SEC filing are the first confirmation of its long-term plans for the industry. A Bain exec in charge of the deal did not return calls Tuesday.

Bain and Gordon are offering $67 million for the common and preferred stock in Live. The total cost of the deal will be more than $100 million, as the buyers will have to refinance existing debt of $62.5 million offset somewhat by $26 million of cash on Live’s balance sheet.

Live shareholders will vote July 9 on the deal. Live filed the proxy for the meeting with the SEC late last week, laying out the background of the sale negotiations and its decision to accept the deal over a competing offer put forward by money managers Canyon Partners.

Live said it had been informed by Bain and Gordon that, at least while it remains a stand-alone entity, they intend “to continue the company’s operations in a manner substantially similar to its current plans, with increasing emphasis on the exploitation of the company’s extensive film library and control of costs in new film acquisition and production.”

The proxy also revealed that during Live’s negotiations with Bain, Live’s senior execs tried to amend the contracts of chairman Roger Burlage and CFO Ronald Cushey to include incentive deals “providing for varying additional payments depending upon the success of the company after the merger.”

But the discussions went nowhere and Live said “at present there are no agreements” about additional payments for the execs. Live said no management changes were “presently contemplated” after the merger although Bain is widely expected to bring in new management.

The proxy revealed Bain originally became involved in discussions with Live after Live’s advisor, Carreden Group, asked Bain to invest money in Live in July last year.

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