RedBall Acquisition (RBAC) to Merge with SeatGeek

October 13, 2021 7:01 AM EDT

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SeatGeek, the high-growth, mobile-centric technology platform that is transforming the live-event experience for fans, teams, and venues, and RedBall Acquisition Corp. (“RedBall”) (NYSE: RBAC), a publicly traded special purpose acquisition company (“SPAC”) with a focus on sports, media and data analytics, today announced the signing of a definitive business combination agreement to take SeatGeek public.

RedBall is a $575 million SPAC, sponsored by an affiliate of RedBird Capital Partners (“RedBird”), a private investment firm with over $5B in assets under management and deep investing and operational expertise across the sports and live events ecosystem. RedBird’s current and prior investments in sports, media, and ticketing include the YES Network, On Location Experiences, Skydance, Wasserman, OneTeam Partners, Fenway Sports Group, the XFL, Toulouse FC, and the IPL’s Rajasthan Royals. Upon the close of the transaction, the combined company will be named SeatGeek.

Founded in 2009, SeatGeek is a high-growth, global technology ticketing marketplace and live entertainment technology platform, uniquely positioned to meet the needs of all stakeholders in the estimated $126 billion global live entertainment ecosystem, which has quickly returned to growth in 2021. Through a mobile-first marketplace and vertically integrated technology platform, SeatGeek makes it easy for fans to buy tickets, attend, and enjoy live events, through innovative features like Deal Score, its proprietary ticket rating technology, Rally, its event-day operating system, and SeatGeek Swaps, the only hassle-free return policy offered by a major ticket marketplace.

SeatGeek’s open-ecosystem enterprise ticketing software empowers teams, venues, and promoters to efficiently grow their businesses while delivering a superior fan experience. SeatGeek is the exclusive ticketing platform for a rapidly increasing number of major teams and venues, including the Brooklyn Nets (Barclays Center), Cleveland Cavaliers (Rocket Mortgage FieldHouse), Dallas Cowboys (AT&T Stadium), and half of the English Premier League. SeatGeek’s platform has seen growth in a number of verticals and venue types, including traditional stadiums, arenas, and theaters, as well as casinos, horse tracks, and golf events.

Well-positioned in the live event marketplace ecosystem, SeatGeek’s vertically integrated technology platform, which connects fans, ticket sellers, and rightsholders, allows it to create new user experiences, offer more comprehensive inventory, and capture strong economics for its enterprise partners. This has created a powerful flywheel benefitting all stakeholders and driving the company’s 70% compound annual growth from 2016 to 2019 and strong market expansion since 2017. Following the suspension of most live events in 2020, SeatGeek has resumed its rapid growth in 2021, signing more new client total annual revenue in the first half of the year, including major new partnerships with the Brooklyn Nets (Barclays Center) and Jujamcyn Theaters, than in any year in the company’s history.

“At SeatGeek we believe live events create powerful experiences that unite humans. We build technology to make more of those experiences possible. Since we started SeatGeek, we’ve focused relentlessly on reinventing live event ticketing. Our technology transforms the historically opaque and complicated process of purchasing tickets into a seamless, delightful experience that enriches events for fans, sellers and rightsholders,” said Jack Groetzinger, CEO and Co-Founder of SeatGeek. “We've grown substantially in 2021, gaining in market share as the live entertainment industry recovers. That makes this a particularly exciting time to go public via this merger with RedBall. Their significant experience and relationships in sports, live entertainment, and ticketing makes RedBall the ideal partner for SeatGeek.”

Alec Scheiner, CEO of RedBall, added, “We believe SeatGeek is truly the future of live event ticketing. SeatGeek’s technology, customer focus, brand and vertically integrated model align the needs of fans and rightsholders, and differentiates SeatGeek from other industry players, as demonstrated by its impressive growth and share gain momentum. Just as importantly, Jack and the SeatGeek team have built a proven and scalable growth model with compelling long-term margins. With additional capital and RedBall’s company building experience and relationships, we’re excited to help scale this visionary company.”

In addition to the funds from RedBall, the transaction is bolstered by a strong roster of strategic investors. The PIPE of $100 million is led by early SeatGeek investor Accel, joined by Ryan Smith, Founder and Executive Chairman of Qualtrics, and owner of Smith Entertainment Group which includes the Utah Jazz, Kevin Durant and Rich Kleiman’s Thirty Five Ventures, and a number of others. The group brings a unique set of industry expertise and relationships across sports, technology and entertainment.

"Accel helps build tech companies that redefine categories,” said John Locke, Partner at Accel. “As long-time investors in SeatGeek, we know that their technology is transforming the live event industry, and we couldn't be more excited to continue our partnership at this key inflection point."

Smith added, "I'm proud to become a part of the SeatGeek story at this key moment. As a team owner, I know how much opportunity there is to modernize the business around sports. With their incredible team and world-class technology, SeatGeek is poised to make a huge impact on our industry."

Proceeds from the transaction will be used to expand SeatGeek’s enterprise partnerships in additional markets and scale marketing, while also investing in continued technology development, strategic M&A, and international expansion.

Jack Groetzinger will continue as CEO of the combined company, overseeing its vision and evolution, joined by SeatGeek’s current executive team.

Transaction Overview

The business combination implies an enterprise value of the combined company of approximately $1.35 billion. Upon completion of the transaction, including the PIPE (as defined below), and assuming no redemptions by public shareholders of RedBall, the current owners of SeatGeek will hold approximately 63.5% of the combined company and current RedBall shareholders will hold approximately 28.5% of the combined company.

The company will receive proceeds of $575 million of cash held in trust, less any deferred underwriting commissions, transaction expenses and redemptions by public shareholders of RedBall exercising such rights, along with $90.5 million from a committed private placement of common stock of RedBall, priced at $10.00 per share, and $9.5 million from a committed private placement of a warrant to purchase 950,000 shares of SeatGeek common stock (collectively, the “PIPE”). In addition, each subscriber to the PIPE will receive with each share of common stock purchased or issuable upon exercise of the SeatGeek direct investment warrant one-third of a warrant to purchase shares of common stock at an exercise price of $11.50 per one whole share and with terms substantially similar to the warrants included as part of RedBall’s units issued in its IPO.

The boards of directors of both RedBall and SeatGeek have unanimously approved the transaction. It is expected to close in the first quarter of 2022, subject to customary closing conditions, including the receipt of regulatory approvals, and approval by RedBall’s shareholders.

Credit Suisse is serving as financial advisor and equity capital markets advisor, and Cooley LLP is serving as legal advisor to SeatGeek. RedBird BD and Goldman Sachs are serving as M&A advisors to RedBall Acquisition Corp, and Fried Frank is serving as legal advisor to RedBall Acquisition Corp. Credit Suisse served as placement agent on the PIPE offering.

Investor Conference Call Information

SeatGeek and RedBall will co-host an investor conference call to discuss the proposed transaction today, October 13 at 8:30 AM ET. For those who wish to listen to the call, please dial 1-877-705-6003 (U.S.) or 1-201-493-6725 (international). Accompanying slides will be available at RedBallAC.com and SeatGeek.com/Investors. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921 (U.S.) or 1-412-317-6671 (international). The passcode for the call and the replay is 13723965. A live webcast of the call will be available at http://public.viavid.com/index.php?id=146896.



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